2017 (10) TMI 1271 - AT - Customs

Classification of imported goods - parts/components/ accessories of various tools/dies - classified under chapter 82 or 84? - Appellant strongly argued that such summary classification of the goods imported under 13 bills of entry cannot be done - It has been claimed by the appellant that none of the goods imported are in the nature of parts of dies - Held that - a significant portion of the imported goods are meant for captive consumption and not intended for manufacture of tools/ dies for M/s Honda. Goods falling in this category include items such as complete sets of dies checking fixtures inspection jigs and various other such items. Such items are definitely required to be classified individually taking note of the nature of the goods imported and its individual classification. In respect of goods which have been imported for use in the design and manufacture of tools/ dies to be supplied to M/s Honda we are of the view that these are required to be assessed as presented at the time of import. If such goods are identifiable as classifiable under any of the headings/ sub-headings of Customs Tariff Heading they are to be classified therein. Only those goods which are specifically identifiable as parts of base metals which are not specifically covered separately under any of headings/ sub-headings will be classified under 8207. The matter remanded to Adjudicating Authority for passing de novo order - appeal allowed by way of remand.

Summary

Issues: Misdeclaration of imported goods leading to reclassification, applicability of Customs Tariff sub-headings, reliance on purchase order, classification under Chapter 82, extended period of limitation.

Issue 1: Misdeclaration of imported goods and reclassification
The appellant, engaged in manufacturing tools and dies, imported goods classified under various customs tariff sub-headings. Upon post clearance audit, it was discovered that the imported goods were interchangeable tools, misclassified under sub-headings 82073000/82075000 instead of 8207. The adjudicating authority ordered reclassification under 8207, demanding differential customs duty, interest, and penalty. The appellant challenged this reclassification, arguing that the goods were not parts but complete dies/die sets, and should be individually classified.

Issue 2: Applicability of Customs Tariff sub-headings
The appellant contended that the imported goods should be classified under individual sub-headings, not summarily under 82073000/82075000. They argued that many goods were not parts and should not be classified under 8207. The appellant provided a detailed table showing the nature and purpose of imported goods, asserting they were rightly classified and not interchangeable tools as claimed by the department.

Issue 3: Reliance on purchase order and classification under Chapter 82
The department argued that the imported goods were parts meant for manufacturing tools/dies for a specific company, justifying classification under Chapter heading 8207. They relied on a purchase order to support this claim. However, the appellant contested this, stating that many goods were for captive consumption and not solely for the specified company. They also challenged the application of Note-2 of Chapter 82, asserting that the goods were not parts but dies sets and other items.

Issue 4: Extended period of limitation
The appellant argued against the invocability of the extended period of limitation, highlighting that customs authorities had previously examined similar goods even before the introduction of self-assessment. They claimed that many goods classified under interchangeable tools needed to be reclassified and removed from the demand.

Judgment Analysis
The Tribunal found merit in the appellant's arguments, noting that a significant portion of the imported goods were for captive consumption and not solely for manufacturing tools/dies for the specified company. They emphasized the need for individual classification based on the nature of goods. The Tribunal held that goods identifiable under specific headings/sub-headings should be classified accordingly, with only unidentified parts classified under 8207. Consequently, the impugned order was set aside, remanding the matter for a fresh decision by the Adjudicating Authority, allowing additional evidence. The appeal was allowed by way of remand, providing relief to the appellant and emphasizing the importance of accurate classification in customs matters.