2018 (8) TMI 1120 - AT - Customs

Change in Classification of imported goods - MIGLITOL - the department took the view that both the goods require to be correctly classified under CTH 3003 9090 under the broad heading of Medicaments - case of appellant is that when the department has been consistently assessing the impugned goods earlier under CTH 2942 0090, they cannot summarily change the classification to CTH 3003 9090 - Held that - Even in a case where the department has sufficient reasons or grounds to change the established classification, natural justice demands that the affected importer should be put to notice as to the intention of the department and the reasons there for. This has not been done in the present case - on this very ground, without going into the merits, the summary change in classification in the instant case is unjustified and cannot be sustained. The Hon ble High Court of Madras, the jurisdictional High Court for this forum in Bush Boake Allen (I) Ltd. Vs. UOI 1995 (1) TMI 78 - HIGH COURT OF JUDICATURE AT MADRAS held that classification is not reversible unless there is change in the circumstances. The arbitrary change of classification without notice to the appellant in respect of the impugned consignments is bad in law and the impugned order upholding the same cannot then sustain - appeal allowed - decided in favor of appellant.

Summary

Issues:
Classification of imported goods under Customs Tariff Heading 2942 0090 or 3003 9090.

Analysis:
The dispute in this case revolves around the classification of goods imported by the appellants under Customs Tariff Headings (CTH) 2942 0090 and 3003 9090. The appellants imported goods declared as 'MIGLITOL' and 'MIFEPRISTONE' under CTH 2942 0090, claiming exemption benefits. However, the department insisted on classifying the goods under CTH 3003 9090 as 'Medicaments,' leading to a higher duty. The Commissioner (Appeals) upheld this classification, prompting the appellants to appeal.

The appellant argued that the goods were consistently classified under CTH 2942 0090 in previous imports, and other Indian importers also imported similar goods under the same classification. They contended that the department's sudden change in classification without proper notice or cause was unjustified. The appellant also highlighted that the goods were single compound goods, not mixtures, as required under CTH 3003 9090.

On the other hand, the department argued that the goods contained multiple constituents, justifying the classification under CTH 3003 9090. They relied on the chemical composition and information from Wikipedia to support their classification decision.

The Tribunal, after considering both arguments, found in favor of the appellant. They emphasized the importance of consistency in classification for regular importers, citing legal precedents that supported the appellant's position. The Tribunal held that the department's abrupt change in classification without proper notice was unjustified and set aside the impugned order, allowing the appeal with consequential benefits.

In conclusion, the Tribunal's decision highlighted the significance of established practices, legitimate expectations, and due process in customs classification matters. The judgment underscored the need for consistency, notice, and valid reasons for any changes in classification to ensure fairness and compliance in customs procedures.