2018 (1) TMI 1225 - AT - Customs

Classification of goods - Track Shoes Collection Hot Rolled of Length 560 mm - whether classified under CTH 84314990 or under CTH 72287011? - Abatement - Benefit of N/N. 21/2002-CUS - Held that - It has been indicated in the invoice that the shipment of track shoe is being done as per the purchase order. The appellants have not been able to sufficiently rebut these facts given in the invoice. In any case, the goods are not available at the time of the PCA. In the circumstances, the appellant has not been able to satisfactorily counter the allegations made by the department. It has also not been informed whether the department s non-filing of appeal by the department has been done on the basis of merits of the case or on the basis of pecuniary ground as per the National Litigation Policy. Appeal dismissed.

Summary

Issues:
1. Classification of imported goods under Customs Tariff Heading (CTH) 84314990 or CTH 72287011.
2. Eligibility for Customs duty exemption under Notification No. 21/2002-CUS.
3. Applicability of Risk Management System in customs clearance.
4. Rebuttal of departmental allegations by the appellant.
5. Impact of previous Commissioner (Appeals) decision on the current case.

Analysis:
1. The case involved a dispute regarding the classification of imported goods declared as "Track Shoes Collection Hot Rolled" under Customs Tariff Heading (CTH) 72287011 by the appellant but identified by the department as parts of an Excavator classified under CTH 84314990. The adjudication order demanded a differential duty of ?13,38,951 along with interest, which was upheld by the Commissioner (Appeals). The appellant argued that the imported goods were raw materials undergoing further processes to become track shoes, supported by photographs. However, the Tribunal found evidence in the invoice indicating the imported goods as "TRACK GRP SALT 1G SHOE" with a BEML part number, leading to a conclusion that the appellant failed to counter the department's allegations effectively.

2. The appellant claimed eligibility for a concessional duty benefit of 7.5% under Notification No. 21/2002-CUS for the imported goods. The Tribunal noted that the goods were cleared under the Risk Management System (RMS) facility, but discrepancies were identified during Post Clearance Audit (PCA). The department argued that the goods were track shoes, not sections, as per the invoice accompanying the goods. The Tribunal found that the appellant could not sufficiently refute the facts presented in the invoice, leading to a dismissal of the appellant's claim for Customs duty exemption.

3. The Tribunal addressed the issue of the applicability of the Risk Management System in customs clearance, emphasizing the discrepancies identified during the Post Clearance Audit despite the goods being cleared under RMS. The appellant's argument regarding the processes the goods undergo before becoming track shoes was not deemed sufficient to counter the department's contentions based on the invoice details.

4. The Tribunal considered the appellant's attempt to rebut the departmental allegations by presenting photographs of the imported goods and the processes involved. However, it was observed that the photographs submitted did not correspond to the goods in question, as evidenced by the invoice details indicating the nature of the imported goods as track shoes. The Tribunal concluded that the appellant failed to adequately challenge the department's assertions, leading to the dismissal of the appeal.

5. The appellant referenced a previous decision by the Commissioner (Appeals) in their favor regarding the classification of goods under CTH 7228. However, the Tribunal noted that the relevance of this previous decision was not established in the current case, as it was unclear whether the goods involved in both appeals were the same. Additionally, the reason behind the department's non-appeal was questioned, highlighting the lack of impact of the previous decision on the present dispute. Consequently, the Tribunal dismissed the appeal based on the appellant's failure to counter the department's allegations effectively.