2018 (12) TMI 1196 - AT - Customs

Classification of imported goods - whether classified as LCD TVs or classified as LCD Monitors and TV Tuners Boards separately? - Confiscation - penalty. Held that - The goods in question were LCD TVs in partly disassembled condition inasmuch as the TV tuner boards were kept separately. Unfinished and semi-finished goods in such a disassembled stage are classifiable as LCD TVs of 42 47 size - the order of the first appellate authority if any is not binding on the Tribunal and such decision if made cannot alter the classification of goods in question. Confiscation - penalty - Held that - It is evident that the appellant had declared the goods as per the invoice packing list and purchase orders as LCD Monitors and TV tuners with remotes separately. Simply claiming the classification as such in their bill of entry does not amount to mis-declaration of the nature of the goods. Therefore the charge of the mis-declaration of the goods is not sustained and consequently confiscation of the goods is liable to be set aside - the penalties imposed on the importer and others in the impugned order also need to be set aside. Demand of duty with interest confirmed but confiscation and penalty set aside.

Summary

Issues:
1. Classification of imported goods as LCD TVs or LCD Monitors and TV Tuner Boards.
2. Confiscation of goods under Section 111(m).
3. Imposition of penalties under Sections 112(a) and 114AA of the Customs Act, 1962.

Classification Issue:
The importer declared goods as two LCD Monitors and TV Tuner Boards but were suspected of importing LCD TVs. Customs officers proposed re-classification, duty recovery, and confiscation. Lower authorities rejected the importer's classification, reclassified goods as LCD TVs, and imposed penalties. Appellants argued correct classification based on purchase orders and supplier invoices. They cited a similar case where goods were classified differently. Tribunal found goods were LCD TVs in disassembled condition, upholding duty demand.

Confiscation Issue:
Appellant's declaration matched invoices and purchase orders, not constituting mis-declaration. Confiscation charge was dismissed, penalties set aside. Appellant's argument of not being allowed to cross-examine the Chartered Engineer was deemed immaterial as the classification was based on submitted documents, not the engineer's report. Confiscation of goods and imposed penalties were overturned.

Penalties Issue:
Appellant's intent to evade duty was questioned due to alleged mis-declaration. However, the Tribunal ruled in favor of the appellant, setting aside penalties imposed under Sections 112(a) and 114AA. The decision was based on the nature of the imported goods as evidenced by submitted documents, not the engineer's report. Confiscation and penalties were annulled, while duty demand was upheld.

This judgment by the Appellate Tribunal CESTAT Hyderabad addressed the classification, confiscation, and penalty issues arising from the import of LCD TVs misdeclared as LCD Monitors and TV Tuner Boards. The Tribunal upheld the duty demand based on the goods' disassembled state, dismissed the confiscation charge due to matching declarations, and overturned penalties citing lack of mis-declaration evidence. The decision highlighted the importance of accurate classification and documentation in customs matters, emphasizing the need for consistency and factual evidence in such cases.