2019 (4) TMI 914 - AT - Customs

Extended period of limitation - improper classification of goods on bonafide belief - re-classification of goods - not a case of mis-declaration of goods - Held that - Both Revenue as well as the appellant were having the understanding that classification assessed prior to 18.04.2011 was correct at the time of clearance of the bills of entry in question. Further, the show cause notice has been issued on 13 July, 2015 by invoking extended period of limitation - the bonafides of the appellants have been proved and it is not a case of suppression of classification by the appellant. The appellant sought classification under chapter 84 of the Act, it is the duty of the adjudicating authority to classify correctly and to examine whether the classification sought is correct or not? Admittedly, the goods were classified under Chapter 84 of the Act. Therefore, proviso to Section 28 of Customs Act, 1962 are not invokable, to invite extended period of limitation in the facts of this case. The extended period of limitation is not invokable in the facts of this case, as whole of the demand confirmed against the appellant is by invoking extended period of limitation - penalty also not imposable - appeal allowed - decided in favor of appellant.

Summary

Issues: Classification of imported goods under chapter heading, Limitation period for issuing show cause notice

Classification of imported goods under chapter heading:
The appellant imported press dies declaring them for manufacturing a particular part of a press machine and classified them under chapter heading 84. However, a show cause notice was issued later to re-classify the goods under chapter 8207 of the Customs Tariff Act, 1975. The Tribunal remanded the matter back to the adjudicating authority, emphasizing the need to classify goods individually based on their nature. In the remand proceedings, the authority upheld the classification under chapter heading 8207, leading to the current appeal. The appellant argued on merits and limitation, citing past Tribunal decisions to support their case. The Tribunal noted the historical classification of the goods and the absence of mala fide intention by the appellant, ultimately ruling that the extended period of limitation was not applicable in this case. Therefore, the demand confirmed against the appellant was set aside, and no penalty was imposed.

Limitation period for issuing show cause notice:
The appellant contested the show cause notice issued after the extended period of limitation, arguing that the bills of entry were previously assessed and cleared under chapter 84. The appellant's understanding, along with the Revenue's actions, indicated that the classification under chapter 84 was accepted before the notice was issued. The Tribunal referred to various cases where extended period of limitation was not invoked due to similar circumstances. It was concluded that the extended period of limitation was not applicable in this case, leading to the setting aside of the demand and no penalty imposed on the appellant.

This detailed analysis of the judgment highlights the issues of classification of imported goods under a specific chapter heading and the limitation period for issuing a show cause notice, providing a comprehensive understanding of the Tribunal's decision and the legal reasoning behind it.