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2018 (2) TMI 1269 - AT - CustomsClassification of imported goods - projectors of a kind which are principally used in an Automatic Data Processing System - While the appellant claims that the projectors imported by it were principally used in an Automatic Data Processing System (ADPS for short, which usually refers to computers) and are thus entitled for exemption, the Revenues case is that the projectors are equally usable in ADP systems as well as with Non-ADP equipments such as DVD Players, Set Top Boxes etc. and thus fall under the residuary heading 85296900 to which the exemption does not apply - whether the projectors imported by the appellant during the period November 2014 November 2016 were entitled for the benefit of Notification No.4/2005-Cus dated1.3.2005 (at Sr. No.17) which grants full exemption from payment of Basic Customs Duty to all goods falling under heading 85286100 of the Customs Tariff? Held that - specific technical differences between projectors of a kind used with ADPS and those used principally with non-ADPS equipment was explained before the Commissioner and brochures containing technical specifications of projectors of these two different kinds were also placed before him in a 99 page compilation - Since the appellant had made categorical assertions about the technical differences and had also backed them up by producing brochures of different manufacturers, the Commissioner was to deal with this crucial submission. The appellant had adequately discharged the initial burden of proof which lay upon it. The burden of proof then shifted upon the Revenue to prove that the technical differences cited were either irrelevant or non-existent. No such attempt has been made by the revenue either in the Show Cause Notice or in the impugned order - the revenue has failed to produce any evidence to rebut the appellants contention or to disprove the evidence produced by the appellant. The evidence on record establishes that the initial burden which lay upon the importer-appellant for claiming the benefit of an Exemption Notification has been adequately discharged by it. The Revenue has not been able to discharge its burden of disproving or rebutting the evidence placed by the appellant-importer. As such, the findings of the Commissioner in the order on the issue of classification cannot be sustained. Extended period of limitation - Held that - It is a settled law that any statutory amendment is prospective in its operation unless it is specifically declared to have retrospective operation. The Finance Act, 2016 does not contain any provision according to a retrospective operation to the said Act. As such, demands which had already become irrecoverable as on 13.5.2015 could not, by virtue of the amendment with effect from 14.5.2016 get resurrected or revived - the demand for the period prior to 13.5.2015 was barred by limitation. Appeal allowed - decided in favor of appellant.
Issues Involved:
1. Classification of imported projectors. 2. Eligibility for exemption under Notification No. 24/2005-Cus. 3. Burden of proof regarding the principal use of projectors. 4. Technical differences between projectors for ADPS and non-ADPS use. 5. Relevance of statements from representatives of Hitachi and Panasonic. 6. Limitation period for raising demand. Issue-wise Detailed Analysis: 1. Classification of Imported Projectors: The core issue was whether the projectors imported by the appellant should be classified under heading 85286100, which pertains to projectors principally used in an Automatic Data Processing System (ADPS), or under heading 85286900, which includes projectors usable with both ADPS and non-ADPS equipment. The appellant argued that their projectors were principally used with ADPS and thus should be classified under 85286100, while the Revenue contended that the projectors had multiple input ports and could be used with non-ADPS equipment, warranting classification under 85286900. 2. Eligibility for Exemption under Notification No. 24/2005-Cus: The appellant claimed exemption from Basic Customs Duty under Notification No. 24/2005-Cus, which applies to goods classified under heading 85286100. The Revenue disputed this claim, asserting that the projectors should be classified under 85286900, which does not qualify for the exemption. The Tribunal noted that similar disputes in the past had been resolved in favor of the appellant, and the Central Board of Excise and Customs had accepted those decisions. 3. Burden of Proof Regarding the Principal Use of Projectors: The High Court of Andhra Pradesh had previously observed that the burden of proving that the projectors were principally used with ADPS rested on the importer. The appellant provided evidence, including brochures and technical specifications, to demonstrate that their projectors were designed for use with ADPS. The Tribunal found that the appellant had adequately discharged this burden, shifting the onus onto the Revenue to disprove the appellant's claims. 4. Technical Differences Between Projectors for ADPS and Non-ADPS Use: The appellant highlighted specific technical differences between projectors meant for ADPS and those for home theatre/entertainment purposes. These differences included contrast ratios, aspect ratios, and the presence of features like 3D capabilities and high refresh rates. The Tribunal found that the Commissioner had failed to address these technical differences adequately and had not provided a basis for concluding that the projectors were equally usable with ADPS and non-ADPS equipment. 5. Relevance of Statements from Representatives of Hitachi and Panasonic: The Revenue relied on statements from representatives of Hitachi and Panasonic, who classified similar projectors under heading 85286900. The Tribunal noted that these statements were opinions unsupported by technical details or reasoning. Moreover, the classification determined by the Indian arms of these companies could not be determinative of the true classification of the products, especially when the parent companies in Japan classified them under heading 85286100. 6. Limitation Period for Raising Demand: The Tribunal addressed the issue of the limitation period for raising the demand. The Commissioner had applied a two-year limitation period, which was introduced by an amendment effective from 14.05.2016. The Tribunal held that demands for the period prior to 13.05.2015, which had already become time-barred, could not be revived by the amendment. Thus, the demand for the period from 08.11.2014 to 13.05.2015 was barred by limitation. Conclusion: The Tribunal concluded that the appellant had adequately demonstrated that the projectors were principally used with ADPS and thus should be classified under heading 85286100, making them eligible for the exemption under Notification No. 24/2005-Cus. The Revenue failed to rebut the appellant's evidence. Additionally, part of the demand was barred by limitation. Consequently, the Tribunal set aside the entire demand for duty, along with interest, penalties, and fines, and allowed the appeal.
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