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2023 (2) TMI 1263 - AT - CustomsClassification of goods - SCM 435 and C45E varieties of steel - eligibility for exemption provided under Sl. No. 190C of Notification No. 21/2002 - misdeclaration and suppression of facts - invocation of extended period of limitation - whether there was indeed a breach and if so whether it was committed with a view to evade tax by misdeclaration and suppression of facts or whether it was a bonafide dispute, without any fraudulent / reckless intention? - HELD THAT - The import took place in the pre-self-assessment period. The obligation was on the part of the department to assess the imported goods. The Appellant had along with the Bills of Entry and invoices, furnished copies of inspection certificate as well. They had produced test certificate containing the composition of various alloys and the relevant invoice at the time of filing the Bills of Entry. This being so the charge of misdeclaration and suppression of fact, fails. Since the onus of assessment was on the department and the Appellant had submitted the necessary documents to facilitate the same, they cannot be held responsible for suggesting a certain classification heading in the Bill of Entry. As held by the Hon'ble Supreme Court in NORTHERN PLASTIC LTD. VERSUS COLLECTOR OF CUSTOMS CENTRAL EXCISE 1998 (7) TMI 91 - SUPREME COURT that mere claiming the benefit of exemption or a particular classification under the bill of entry does not amount to mis-declaration or suppression of facts. The charge of the Appellant having mis-declared the goods and supressed facts fails. The demand has hence to be restricted to the normal period and the penalty needs to be set aside. The impugned order is modified on the said terms. The appeal is disposed of.
Issues:
Classification of SCM 435 steel for exemption eligibility, reclassification under Chapter 7211, invocation of extended period for demanding duty, imposition of penalty under Section 114A of the Customs Act, 1962, applicability of extended period of limitation, misdeclaration and suppression of facts. Classification of SCM 435 Steel for Exemption Eligibility: The officers of DRI visited the appellant's unit and found SCM 435 steel not eligible for exemption under Sl. No. 190C of Notification No. 21/2002. The appellant accepted this and paid the differential duty. The C45E variety of steel was tested and found eligible for classification under Chapter 7211. Show Cause Notice was issued for demanding differential duty for SCM 435 steel along with fine and penalty. The adjudicating authority reclassified the goods under CTH 7226 and imposed a penalty. The Commissioner (Appeals) upheld this order. Invocation of Extended Period for Demanding Duty and Imposition of Penalty: The appellant argued that the extended period of limitation should not apply as subsequent show cause notices were issued for the same period. They contended that the onus of classification was on the department during the pre-self-assessment period. The appellant provided necessary documents for assessment, including test certificates and invoices. The department arrived at the correct classification based on these documents. The charge of misdeclaration and suppression of facts failed as the goods were not mis-declared, and the appellant had cooperated by submitting required documents. Misdeclaration and Suppression of Facts: The Tribunal found no dispute regarding the classification of goods but examined whether there was a breach committed to evade tax through misdeclaration and suppression of facts. The appellant had provided all necessary documents for assessment, and the correct classification was determined based on these documents. The charge of misdeclaration and suppression of fact failed as the appellant had not mis-declared the goods, and the onus of assessment was on the department during the pre-self-assessment period. Conclusion: The Tribunal held that the charge of misdeclaration and suppression of facts failed. The demand was restricted to the normal period, and the penalty was set aside. The impugned order was modified accordingly, providing consequential relief to the appellant.
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