2016 (6) TMI 1066 - AT - Customs

Classification and rate of duty in import of MP3 player / CD players - classification under the tariff item 85198990 or 85198940 - MRP based duty / CVD - rate of abatement - appellant in the bill of entry classified the goods under 85198890 and paid BCD @ 10% while the BCD to MP3 Player is 5% as per Notification No. 21/2008-Customs - appellant categorically classified the goods as other than MP3 Player - Serial No. 90 of the table appended to Notification No. 49/2008 CE (NT) dated 24.12.2008 allows 35% abatement from MRP for charging CVD on all goods other than MP3 player or MPEG 4 player - Subsequently the differential duty has been demanded on the ground that the goods were MP3 player and therefore the abatement would be only 30% Held that - We fail to understand as to on what ground/ basis it has been alleged/ asserted after the goods were cleared that those were MP3 players when the goods were not available for examination nor was there any evidence/ material on the basis of which it could be alleged/ asserted that the goods were MP3 players. - there is sustainable ground to hold that the goods cleared were MP3 players - demand set aside - Decided in favor of assessee.

Summary

Issues:
Classification of imported goods under the Customs Tariff - Differential duty demand based on classification - Abatement from MRP for charging CVD - Appellant's contention of importing CD Players, not MP3 Players - Allegation of goods being MP3 Players by the department - Sustainability of differential duty demand.

Analysis:
The appeal was filed against an Order-in-Appeal confirming a differential duty demand of ?23,806 on the basis that the appellant imported MP3 players with an incorrect abatement rate. The appellant argued that they imported CD Players, not MP3 Players, classified under a different category with a higher Basic Customs Duty (BCD). The department contended that the goods described in the invoice as 2 DIN MP3/CD Player justified the differential duty demand.

Upon review, the Tribunal noted that the appellant classified the goods under a category with a higher BCD, indicating they were not MP3 Players. The classification for MP3 Players was different, and the abatement rate for goods other than MP3 Players was 35%, as per the relevant notification. The Tribunal questioned the basis for alleging the goods were MP3 Players after clearance, highlighting the lack of evidence or examination supporting this claim.

Given the circumstances, the Tribunal found no grounds to support the allegation that the goods were MP3 Players. Consequently, the impugned order confirming the differential duty demand was set aside, and the appeal was allowed. The decision emphasized the commercial impracticality of paying a higher BCD for goods classified as MP3 Players solely to claim a slightly higher abatement rate, reinforcing the appellant's classification of the goods as CD Players.

This judgment underscores the importance of accurate classification of imported goods under the Customs Tariff and the necessity for proper evidence to support any allegations of misclassification. The Tribunal's decision focused on the factual and legal aspects of the case, ultimately ruling in favor of the appellant based on the classification and abatement provisions applicable to the imported goods.