2016 (1) TMI 1049 - AT - Customs

Import of Slurry Seal Machine - Claim of exemption - It was fitted/mounted on a truck having Left Hand Drive and speedometer showing the speed up to 140 KMPH. Accordingly the Custom department proposed the classification under CTH 87059000 as against the appellant s claim in the Bill of Entry No. 892599 under CTH 84791000. - The appellant waived the show cause notice but requested to personal hearing. However, they agitated the matter before Adjudicating Authority. Held that - Without going into the issue of classification, we find that a irrespective classification of the import goods whether under CTH 8479 or 8705, the exemption Notification 21/2002 is admissible only if the goods appearing in the list 18 of Notification No. 021/2002-Cus dated 01-03-2002 (Sr. No. 230). However, the Ld. Adjudicating Authority has not decided this issue that if the goods classified under Chapter 8705 whether the exemption is available to the subject imported goods. We find that the goods imported is Slurry Seal Machine used for construction of road by operation of paving of the material on the road. There is no dispute that Slurry Seal Machine is mentioned in list 18 of Notification No. 021/2002-Cus dated 01-03-2002 (Sr. No. 230). The matter deserves to be reconsidered. - Matter remanded back.

Summary

Issues:
1. Classification of imported goods under Customs Act, 1962
2. Eligibility of exemption under Notification No. 021/2002-Cus
3. Violation of principles of natural justice in adjudication process

Classification of Imported Goods:
The appellant imported a "Slurry Seal Machine" for road construction, declaring it under CTH 84791000 with a claimed duty exemption under Notification No. 021/2002-Cus. However, the assessing authority contended that the activity of repairing cracks in roads did not align with the conditions of the exemption notification. The Adjudicating Authority classified the goods under CTH 87059000, noting that the machine was mounted on a vehicle with Left Hand Drive, contrary to the appellant's claim. The appellant argued for consistent classification under CTH 8479 based on past imports for road construction purposes. They emphasized that the machine was used for paving operations and was correctly classifiable under CTH 8479. The Adjudicating Authority also mentioned the appellant's acceptance of not being eligible for the exemption under Notification No. 021/2002-Cus, settling the issue under Section 17(s) of the Customs Act, 1962.

Eligibility of Exemption under Notification No. 021/2002-Cus:
The Adjudicating Authority failed to address the eligibility of the exemption under Notification No. 021/2002-Cus if the goods were classified under CTH 8705. The Appellate Tribunal noted that regardless of the classification, the exemption was applicable only if the goods were listed under list 18 of the notification. As the "Slurry Seal Machine" was mentioned in list 18 and used for road construction, the Tribunal directed the Adjudicating Authority to reconsider the eligibility of the exemption for the imported machine classified under CTH 8705. The conversion of the vehicle to Right Hand Drive and the production of a certificate from the R.T.O. supported the appellant's case, leading to the dropping of confiscation and waiver of penalty.

Violation of Principles of Natural Justice:
The appellant's counsel argued that the adjudication order disregarded their submissions, specifically on classification and exemption eligibility. They contended that the Adjudicating Authority should have considered the exemption separately from the classification issue. The counsel highlighted the appellant's compliance with necessary certificates from authorities and the correct declaration of the goods as a "Slurry Seal Machine." The Tribunal acknowledged the seriousness of the violation of natural justice principles and directed a reconsideration of the eligibility of the exemption, emphasizing the need for a fair assessment process.

This detailed analysis of the legal judgment addresses the issues of classification of imported goods, eligibility of exemption under Notification No. 021/2002-Cus, and the violation of principles of natural justice in the adjudication process. The Tribunal's decision to remand the case for a fresh consideration of the exemption eligibility demonstrates a commitment to fair and thorough legal proceedings.