2019 (10) TMI 460 - AT - Customs

Classification of imported goods - Melamine ware viz Kitchenware and Tableware - whether classified under CTH 39249090 or classifiable under CTH 39241090? - benefit of N/N. 46/2011-Cus - extended period of limitation - HELD THAT - From the scheme of the tariff entries it is quite evident that Tableware and Kitchenware, have been specifically mentioned and classified under heading 392410. While other household articles and hygienic or toilet articles, of plastics, have been grouped together and put under heading 392490, under description of others. It is general principle of classification that specific entry should be preferred over the general entry. From the description of the goods given on the Bill of Entry and the invoices relating to the import describing the goods as Pickle Set , Butter Dish , Short Tumbler , Spoon , Casserole Bowl etc., we are convinced that the goods were appropriately classifiable under heading 392410 and not under heading 392490 as claimed by the appellant From the plain reading of the notification it is evident that the said exemption is available only in respect of the goods classifiable under tariff heading 392490 and not under heading 392410. Hence the order of Commissioner denying the benefit of exemption under this notification cannot be faulted with. Extended period of limitation - HELD THAT - By giving the correct description on the documents relating to import clearance appellants have discharge the burden of making correct declaration on the Bill of Entry. Hence any error in classification or the exemption claimed on Bill of Entry cannot be misdeclaration with the intention to evade payment of duty for the purpose of invoking extended period of limitation. Hence demand made by invoking extended period of limitation needs to be set aside. Since we have upheld that the benefit of exemption under Notification No 46/2011-Cus was not admissible to the appellant and demand could not have been made by invoking the extended period of limitation as provided for by Section 28(4), the demand which falls within the normal period of limitation needs to be upheld - Only after determining the duty demandable and recoverable within the normal period of limitation, demand of interest under Section 28AA can be made or quantified. While setting aside the demand of interest made under Section 28AA, we make it clear that the interest will be payable in terms of Section 28AA on the redetermined demand. The fact that the goods correspond to declaration in respect of the description and value is sufficient to take the imported goods away from the application of these two clauses. Hence the order holding goods liable for confiscation and imposition of penalty under Section 112(a) cannot be sustained - Since we have held that appellant had not made any misdeclaration with intent to evade payment of duty, we are setting aside the penalty imposed under Section 114A of Customs Act, 1962. Matter remanded back to Commissioner for redetermination and re-quantification of the demand which can be made by denying the exemption under Notification No 46/201-Cus to the appellants within the normal period as provided by Section 28(1) - appeal allowed by way of remand.

Issues Involved:
1. Correct classification of imported goods.
2. Admissibility of exemption under Notification No 46/2011-Cus.
3. Invocation of extended period of limitation under Section 28(4) of the Customs Act, 1962.
4. Liability for confiscation under Section 111(m) and 111(o) of the Customs Act, 1962.
5. Imposition of penalties under Sections 112(a) and 114A of the Customs Act, 1962.
6. Denial of cross-examination request.

Issue-wise Detailed Analysis:

1. Correct Classification of Imported Goods:
The primary issue for consideration was the correct classification of the imported goods, which were described as "Melamine ware viz Kitchenware and Tableware." The appellant had classified these goods under CTH 39249090, but the revenue argued that they should be classified under CTH 39241090. The Tribunal noted that "Tableware and Kitchenware" have been specifically mentioned under heading 392410, while other household articles are grouped under heading 392490. The Tribunal emphasized the principle that a specific entry should be preferred over a general entry, as per Rule 3(a) of the General Rules of Interpretation of Tariff. The Tribunal concluded that the goods were appropriately classifiable under heading 392410 and not under heading 392490.

2. Admissibility of Exemption under Notification No 46/2011-Cus:
The appellant had claimed the benefit of exemption under Notification No 46/2011-Cus, which was available for goods classifiable under tariff heading 392490. Since the Tribunal determined that the goods were correctly classifiable under heading 392410, it held that the benefit of the exemption under Notification No 46/2011-Cus was not admissible. The Tribunal upheld the Commissioner's order denying the benefit of the exemption.

3. Invocation of Extended Period of Limitation under Section 28(4) of the Customs Act, 1962:
The Commissioner had invoked the extended period of limitation under Section 28(4) of the Customs Act, 1962, on the grounds of willful suppression of facts by the appellant. The Tribunal noted that with the introduction of self-assessment, the onus shifted to the importer to declare the correct classification and applicable rate of duty. The Tribunal found that the appellant had previously classified the goods under CTH 392410 and only changed the classification after the introduction of the exemption notification. The Tribunal concluded that there was no misdeclaration with the intention to evade payment of duty, and thus, the invocation of the extended period of limitation was not justified. The demand made by invoking the extended period of limitation was set aside.

4. Liability for Confiscation under Section 111(m) and 111(o) of the Customs Act, 1962:
The Commissioner had held that the goods were liable for confiscation under Section 111(m) and 111(o) of the Customs Act, 1962. The Tribunal noted that these clauses are applicable to cases where the goods do not correspond in respect of value or any other particular with the entry made under the Act. The Tribunal found that the goods corresponded to the description and value declared in the Bill of Entry, and thus, the order holding the goods liable for confiscation could not be sustained.

5. Imposition of Penalties under Sections 112(a) and 114A of the Customs Act, 1962:
The Commissioner had imposed penalties under Sections 112(a) and 114A of the Customs Act, 1962. The Tribunal set aside the penalty under Section 114A, citing the decision in Rajasthan Spinning and Weaving Mills Ltd., which held that penalties under this section depend on the existence of conditions expressly stated in the section. Since the Tribunal found no misdeclaration with intent to evade duty, the penalty under Section 114A was not justified. Similarly, the penalty under Section 112(a) was also set aside.

6. Denial of Cross-Examination Request:
The appellant had requested the cross-examination of persons whose statements were relied upon, but the Commissioner denied the request. The Tribunal noted that the Commissioner had provided sufficient reasons for denying the cross-examination and found no merit in the appellant's assertion that natural justice was violated.

Conclusion:
The Tribunal set aside the impugned order and remanded the matter back to the Commissioner for redetermination and re-quantification of the demand within the normal period of limitation. The appeal filed by the appellant was allowed, and the matter was remanded to the Commissioner for further proceedings.

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