2020 (3) TMI 530 - AT - Customs

Classification of imported goods - Hot Rolled Steel Plates - whether classified under CTH No. 7208 or under CTH No. 7225? - benefit of N/N. 21/2002 dated 01.03.2002 - HELD THAT - In the case of M/s V.K. Industrial Corporation Ltd. Final Order No. A/91475/2017 dated 11.12.2017 has set aside imposition of penalty on the ground that the duty amount along with interest was paid before issuance of the show cause notice. Since, the issue involved in the present case is identical to the case decided by the Tribunal, we find that the ratio of the said order should be applicable to these cases for setting aside the penalties imposed in the adjudication orders dated 27.06.2012 and upheld in the impugned order dated 27.05.2013. The appeals are allowed to the extent of setting aside the penalties confirmed therein - Appeal allowed in part.

Summary

Issues:
1. Classification of imported goods under CTH No. 7208 or 7225.
2. Benefit of duty exemption under Notification No. 21/2002 dated 01.03.2002.
3. Imposition of penalties under Section 114A and 112(a) of the Customs Act, 1962.
4. Applicability of sub-section (2) of Section 28 for penalty imposition.
5. Comparison with a previous Tribunal order regarding penalty imposition.

Analysis:

1. Classification of Goods: The appellant imported Hot Rolled Steel Plates and claimed classification under CTH No. 7208, while the department contended that the goods should be classified under CTH No. 7225. The appellant accepted this contention and voluntarily paid the differential duty.

2. Duty Exemption: The appellant sought the benefit of duty exemption under Notification No. 21/2002 dated 01.03.2002. However, the department observed that this benefit should not be available due to the classification of the goods under CTH No. 7225.

3. Penalties Imposed: The department initiated show cause proceedings against the appellant and imposed penalties under Section 114A and 112(a) of the Customs Act, 1962. The learned Consultant argued that since the duty amount along with interest was paid before the issuance of the show cause notice, the penalties should not be imposed.

4. Applicability of Section 28: The Consultant relied on the benefit of sub-section (2) of Section 28 to argue against the imposition of penalties. Reference was made to a previous Tribunal order where penalties were set aside under similar circumstances.

5. Tribunal Decision: The Tribunal referred to a previous order where penalties were set aside due to the payment of duty before the show cause notice. Consequently, the penalties imposed on the appellants were set aside in line with the previous decision. The appeals filed by other appellants were also allowed based on the same reasoning.

In conclusion, the Tribunal modified the impugned orders and allowed the appeals to the extent of setting aside the penalties imposed, citing the precedent set by a previous Tribunal order.