2019 (2) TMI 506 - AT - Customs

Imposition of Anti-dumping duty - enhancement of assessable value - change in classification of imported goods - trapezoidal roof profiles - primary claim on behalf of the appellants is that the imported goods are not flat rolled products of iron or steel as the leeway of corrugation , afforded by note 1(k) in chapter 72 of First Schedule to Customs Tariff Act, 1975, cannot be said to include trapezoidal profile - differential rate of duty - applicability of N/N. 2/2017-Cus (ADD) dated 11th January 2017. Held that - Undoubtedly, of the two headings, the one in the impugned order is more specific. A priori, that description would not stretch beyond fitment to sheets of uniform flatness; however, the chapter note does allow corrugated sheets to be considered as flat rolled probably because of the similarity of process of conversion. The literature adduced by Learned Counsel does draw a distinction between corrugated and trapezoidal with functional dissimilarities in evidence. They are, therefore, not amenable to interchangeable denomination in common parlance. The deliberate inclusion of corrugated in flat rolled could well have encompassed the distinct and separate trapezoidal had legislative intent determined so as both were in use by the trade when the tariff was enacted. There is no evidence to support the claim that the goods are utilized exclusively in erection of structures; that may well be true but absence of material to conclude so mandates the ascertainment of fitment within the alternative classification that is sought. The goods do conform to that description and, consistent with the Explanatory Notes referred supra, we concur with that alternative classification. Amidst the confusion that is manifest in the show cause notice, and the impugned order, the non-applicability of the classification claimed in the bills of entry cannot be held to be deliberate - there is no justification for confiscation and the imposition of the penalties proposed in the show cause notice. Demand set aside - confiscation and penalties set aside - the classification of the goods confirmed under heading no. 7216 9100 of First Schedule to Customs Tariff Act, 1975 - appeal allowed - decided in favor of appellant.

Summary

Issues Involved:
Challenging levy of differential duty, application of anti-dumping duty, penalties under Customs Act, 1962, redemption on confiscation, classification of imported goods, valuation under Customs Act, 1962.

Detailed Analysis:

1. Levy of Differential Duty and Anti-Dumping Duty:
The appeals challenged the levy of differential duty and anti-dumping duty on imported 'trapezoidal roof profiles'. The proceedings initiated post-clearance raised concerns of false declarations to avoid scrutiny. The change in classification and imposition of anti-dumping duty led to penalties under sections 112 and 114AA of the Customs Act, 1962. The appellants contested the classification under heading no. 7210 4100, resulting in differential duty.

2. Procedural Irregularities and Classification Discrepancies:
The appellants highlighted procedural flaws, including a corrigendum altering the classification without proper application of mind. The impugned order's reliance on 'minimum import price' for valuation was deemed inappropriate under section 14 of the Customs Act, 1962. The classification under heading no. 7210 was questioned, leading to a detailed examination of the classification dispute.

3. Valuation and Tariff Rules Compliance:
The judgment emphasized the statutory framework for valuation of imported goods under section 14 of the Customs Act, 1962. The use of 'minimum import price' as a substitute for transaction value was deemed legally unsound. The judgment scrutinized the invocation of notification no. 38/2015-20 for valuation, highlighting its limitations and lack of compliance with Customs Valuation Rules.

4. Classification Dispute and Legal Interpretations:
The classification dispute centered on whether the imported goods qualified as 'flat rolled products of iron or steel'. The appellants argued against the classification under heading no. 7210, citing the distinct nature of 'trapezoidal' profiles. Legal interpretations, including the application of General Interpretative Rules and judicial precedents, were considered to resolve the classification discrepancy.

5. Judicial Review and Alternative Classification:
The judgment analyzed the arguments presented by both parties regarding the appropriate classification of the imported goods. The appellants advocated for an alternative classification under heading no. 7216 9100, emphasizing the manufacturing process and functional differences between 'corrugated' and 'trapezoidal' profiles. The judgment concluded that the impugned order's classification was not valid, supporting the alternative classification proposed by the appellants.

6. Final Decision and Setting Aside Demands:
The judgment set aside the demands, confiscation, and penalties imposed in the impugned order. It confirmed the classification of the goods under heading no. 7216 9100 of the Customs Tariff Act, 1975, based on a thorough analysis of the classification dispute and legal principles governing customs valuation and classification.

This detailed analysis of the judgment provides insights into the issues raised, procedural irregularities, valuation considerations, classification disputes, legal interpretations, and the final decision rendered by the Appellate Tribunal CESTAT MUMBAI.