2019 (5) TMI 1737 - AT - Customs

Principles of natural justice - non-speaking order - Compliance with the procedure prescribed in Section 17(6) of Customs Act 1962 - change in classification - the original authority had failed to issue a speaking order envisaged in Section 17 of Customs Act 1962 within the stipulated time - HELD THAT - It is seen from the bill of entry that despite alteration of classification by the assessing officer the description of the goods remained unaltered as plastic toys . Therefore there can be no doubt that the goods in question were toys and intended for use as toys for amusement of infants. Had it been otherwise a separate description should have been entered by the proper officer of Customs. In the absence of such it is concluded that the miniature version of the goods are toys. The failure to issue a speaking order is also inconsistent with the statutory obligation that devolves on the assessing officer. The direction of the first appellate authority to subject the assessment to proceedings under Section 17(6) of Customs Act 1962 is not legal and proper for being tantamount to approval the breach of law by the assessing officer - Appeal allowed - decided in favor of appellant.

Summary

Issues:
Classification of goods under Customs Tariff Act, 1975
Compliance with procedure under Section 17 of Customs Act, 1962

Classification of goods under Customs Tariff Act, 1975:
The appeal involved a dispute regarding the classification of a consignment of 'toy rocker' under Heading No. 9503 00 90 of the Customs Tariff Act, 1975, as claimed by the appellant. The assessing officer reclassified the goods under 9403 89 00, resulting in a differential duty. The appellant argued that the goods were miniature versions of furniture intended for amusement, but the lower authorities maintained the reclassification. The Tribunal noted that despite the reclassification, the description of the goods in the bill of entry remained as 'plastic toys,' indicating the goods were indeed toys intended for amusement. The Tribunal concluded that the failure to issue a speaking order, as required by Section 17 of the Customs Act, 1962, was inconsistent with the statutory obligation of the assessing officer. The Tribunal referred to a Supreme Court decision in O.K. Play (India) Ltd. v. Commissioner of Central Excise, emphasizing the importance of proper classification.

Compliance with procedure under Section 17 of Customs Act, 1962:
The Tribunal observed that the original authority failed to issue a speaking order within the stipulated time, as mandated by Section 17 of the Customs Act, 1962. The Tribunal highlighted that the direction of the first appellate authority to subject the assessment to proceedings under Section 17(6) was not legal, as it would amount to approving the assessing officer's breach of law. Consequently, the Tribunal set aside the impugned order and allowed the appeal, providing consequential relief to the appellant. The Tribunal's decision was based on the inconsistency in the classification of goods, the failure to issue a speaking order, and the statutory obligations under the Customs Act, 1962.

Conclusion:
The Tribunal's judgment focused on the correct classification of goods under the Customs Tariff Act, 1975, and the necessity for compliance with the procedural requirements outlined in the Customs Act, 1962. By addressing these issues, the Tribunal provided a detailed analysis of the case, referencing relevant legal provisions and precedents to support its decision to allow the appeal and set aside the original order.