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2018 (11) TMI 370 - AT - CustomsClassification of imported goods - Old and Used Pipelines, Pontoons etc. as an integral part of the dredgers - Dredgers were imported earlier - now appellant sought to classify the pontoons under CTH 89051000 (same as dreedgers) - the Revenue says that goods imported under both the said bills of entry dated 07.02.2017 were imported separately, the same cannot be a part of accessories of a complete Dredger already imported with Pipelines, Pontoons and other accessories, and are classifiable under respective head of the goods i.e. 89079000 and 73049000/85015390 of the Customs Tariff Act, 1975 - Benefit of N/N. 12/2012-Cus dated 17.03.2012. The entire case of the Revenue is on the basis that the two consignments i.e. bills of entry No. 8465433 and 8465442 both dated 07.02.2017 were not imported along with three dredgers. Therefore, the same cannot be classified under the head of Dredgers and will be classifiable under the respective head of individual parts. Held that - In the peculiar facts of the present case, there is no difference in the nature of the goods imported with three dredgers and goods imported subsequently under two bills of entry dated 07.02.2017. It is also not disputed that whether the same parts and accessories i.e. pontoons, pipes etc. imported with first consignment and similar items imported in the second consignment were used put together for the activity of dredging for their clients. Both the consignments were imported by the appellant for only one project. Since the dredger and its parts are huge in size and quantity, it is not possible to import the entire consignment at a time. Therefore, the entire goods were imported in piece-meal. However, all the goods presented together would constitute dredger and then only it can be used for the work assigned to the appellant. From the facts of the case, even though the same parts were imported along with three dredgers but the remaining parts which were imported subsequently which are subject matter of this case were used for the same work in the same manner. In this position, some parts of same goods cannot be treated differently. Once the integral part of equipment is imported and other equipment and parts are imported then, even though the goods transported at different time, shall be considered as put together and classification to be decided accordingly. Therefore, merely because of the fact that the goods in question in the present case imported under two bills of entry and subsequent to import of three Dredgers for the purpose of classification of the consignment to be taken together and will merit classification under one Chapter head of Dredger. As regards the heavy reliance placed by the department on Accessories (Condition) Rules, 1963, that only if the parts and accessories are imported along with dredgers then only it is classifiable under the head of dredger. In this regard, we find that there is no dispute that the same importer has imported all the goods for the same purpose i.e. execution of works contract. Therefore, it cannot be said that the second consignment was not imported along with dredgers. From HSN Notes of Chapter 89, it can be seen that the goods imported by the appellant i.e. pontoons, pipes and other accessories are not excluded, therefore, the said goods being integral part of Dredger merit classification as Dredger under CTH 8905. This also clearly shows that the goods in question i.e. pipes, pontoons and other accessories are nothing but part and parcel of Dredger and are correctly classifiable as dredger under 8905. The pontoons imported by the appellant in the present case is in any case not classifiable under CTH 89011090, however, it is clearly classifiable as integral parts of dredgers under CTH 89051000 - all parts of Dredger has to be classified under the head Dredger i.e. 89051000 - the goods of bills of entry No. 8465433 and 8465442 both dated 07.02.2017 are correctly classifiable under heading CTH 89051000 and accordingly eligible to exemption Notification No. 12/2012-Cus dated 17.03.2012. Appeal allowed - decided in favor of appellant.
Issues Involved:
1. Classification of imported goods. 2. Applicability of exemption Notification No. 12/2012-Cus dated 17.03.2012. 3. Demand of differential customs duty. 4. Imposition of penalties under Section 114A and Section 112 read with Section 114AA of the Customs Act, 1962. 5. Confiscation of imported goods. Detailed Analysis: 1. Classification of Imported Goods: The appellant/importer executed a Work Contract for dredging and reclamation and imported three old and used Dredgers, one Barge, two self-propelled Multicat along with accessories, pipelines, and pontoons in January 2017. In February 2017, they imported "Old and Used Pipelines, Pontoons etc." declaring them as integral parts of the dredgers already imported. The appellant declared the goods under CTH 89011010 and 89051000 and claimed exemption under Notification No. 12/2012-Cus dated 17.03.2012. The Revenue contended that the goods imported in February were separate and not part of the dredgers, thus reclassifying them under respective heads (89079000 and 73049000/85015390). 2. Applicability of Exemption Notification No. 12/2012-Cus dated 17.03.2012: The appellant argued that the classification should be consistent with the initial import as the subsequent imports were for the same project and purpose. They referred to British Standards and previous judgments to support their claim that the pipelines and pontoons were integral parts of the dredgers and should be classified under the same heading. The Revenue, however, maintained that the separate importation excluded these items from the dredger classification, thus making them ineligible for the exemption. 3. Demand of Differential Customs Duty: The Adjudicating Authority confirmed a demand of differential duty amounting to ?8,68,74,159/- under Section 28(4) of the Customs Act, 1962, along with interest under Section 28AA. The appellant contended that the classification and subsequent duty demand were incorrect as the goods were integral parts of the dredgers and should be classified accordingly. 4. Imposition of Penalties: Penalties were imposed under Section 114A and Section 112 read with Section 114AA of the Customs Act, 1962. The appellant argued that there was no malafide intention or misstatement of facts, and the issue was purely one of classification interpretation. They cited previous judgments to support their claim that penalties were not applicable in the absence of suppression of facts. 5. Confiscation of Imported Goods: The Adjudicating Authority ordered the confiscation of the goods under Section 111(m) of the Customs Act, 1962, with an option to redeem them on payment of a fine. The appellant contended that the goods were correctly declared and not liable for confiscation, citing previous tribunal decisions. Tribunal's Findings: The Tribunal found that the goods imported in both consignments were for the same project and purpose, and thus should be classified together under CTH 89051000. They relied on Rule 2(a) of the General Rules of Interpretation, which considers unassembled or disassembled components as having the essential character of the complete article. The Tribunal also referred to previous judgments, including Boskalis Dredging India Pvt. Limited, which supported the classification of such goods under the dredger heading. Conclusion: The Tribunal set aside the impugned order, holding that the goods imported in February 2017 were integral parts of the dredgers imported in January 2017 and should be classified under CTH 89051000. Consequently, the demand for differential duty, penalties, and confiscation were also set aside, providing relief to the appellant.
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