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2021 (6) TMI 4 - AT - CustomsLevy of IGST or Customs Duty - Classification of goods - Bronze Cladding Panel for Statue of Unity Project - whether classifiable under Customs Tariff Act (CTEH 83119000) as 'other for kind use for soldering, brazing, welding' which is subject to IGST @ 18% or the same was classifiable under CTH 8306 2110 as 'statuettes', which is subject to IGST @ 12%? HELD THAT - Undisputedly the goods imported by the appellant are parts of statue of Sardar Vallabhbhai Patel which was installed andnamed as Statue of Unity , therefore, there is no doubt that the goods imported by the appellant have been used as part of entire Statue of Unity - If the contention of revenue is by any imagination is accepted then the stated statue should also be called as welding material because the statue is nothing but the assembled form of the same imported parts i.e. Bronze cladding panels, which is obviously a weird imagination. In the present case the goods imported by the appellant are not used for any of the said process described in CTH 8311. The goods itself is a part of bronze metal which are piece by piece joined by welding, soldering process achieved the form of Statue of Unity. Therefore, it is clear that the goods imported were not used as a welding material but the goods itself is a end product that is part of statue. As submitted by the appellant for the purpose of joining piece by piece the part of the statue, they have imported separately the welding material. Those welding material are in fact classifiable under CTH 8311 and not the present goods imported by the appellant. The revenue either in the Show cause notice or in the impugned order did not give a plausible reasoning why the imported goods i.e. parts of statue are classifiable as welding material under CTH 8311 9000 - It is admitted fact that the part of the statue imported by the appellant is complete part and it does not have any coating or cored with flux material, therefore, it is clear that that parts / components of statue imported by the appellant by any stretch of imagination cannot be brought into the tariff entry of CTH 8311 9000fpr the simple reason that the same is not a welding material. Thus, irrespective whether the classification claimed by the appellant is correct or not since the classification proposed by the Revenue is absolutely incorrect, the entire case of the Revenue will not sustain. Therefore, we are not addressing the issue that whether the appellant s classification was correct or otherwise. The appellant also made an alternate submission that even if the classification declared by them under CTH 8306 2110 is incorrect the goods are otherwise classifiable under CTH 9703 in such tariff entry also the IGST Rate is 12% and therefore, there will be no revenue implication. However, since the Revenue s claim of classification is held to be incorrect the entire proceeding of the Revenue is quashed. The impugned order is set aside - appeal allowed - decided in favor of appellant.
Issues Involved:
1. Classification of Bronze Cladding Panels under the Customs Tariff Act. 2. Determination of applicable IGST rate. 3. Onus of proof for classification. 4. Validity of Revenue's classification argument. 5. Alternate classification proposal by the appellant. Issue-wise Detailed Analysis: 1. Classification of Bronze Cladding Panels under the Customs Tariff Act: The primary issue is whether the Bronze Cladding Panels for the Statue of Unity Project should be classified under CTH 8311 9000 as 'other for kind use for soldering, brazing, welding' (subject to IGST @ 18%) as argued by the Revenue, or under CTH 8306 2110 as 'statuettes' (subject to IGST @ 12%) as claimed by the appellant. The appellant imported these panels in pieces, which were then welded together to form the statue. The Revenue classified these panels under CTH 8311 9000, arguing they were used for welding processes. However, the Tribunal found that the panels themselves were not welding materials but parts of the statue, thus not fitting the description under CTH 8311. 2. Determination of Applicable IGST Rate: The appellant argued that the panels should be classified under CTH 8306 2110, attracting a 12% IGST rate. The Tribunal agreed, noting that the panels were parts of the statue and not materials used for welding. The Tribunal emphasized that the classification under CTH 8311 9000 was incorrect because the panels did not meet the criteria of being coated or cored with flux material as required under this heading. 3. Onus of Proof for Classification: The Tribunal reiterated that the onus of establishing the correct classification lies with the Revenue. The Tribunal cited several judgments, including Hindustan Ferrodo Limited and HPL Chemicals Limited, to support this principle. The Revenue failed to provide adequate reasoning or evidence to support their classification under CTH 8311 9000. 4. Validity of Revenue's Classification Argument: The Tribunal found the Revenue's argument for classification under CTH 8311 9000 to be without basis. The Revenue's reliance on dictionary definitions and the CERA audit objection was deemed insufficient. The Tribunal noted that the Revenue did not provide a plausible explanation for their classification and that the audit objection was raised without proper justification. 5. Alternate Classification Proposal by the Appellant: The appellant suggested that if their classification under CTH 8306 2110 was incorrect, the panels could alternatively be classified under CTH 9703 0010, which also attracts a 12% IGST rate. The Tribunal did not find it necessary to address this alternate classification in detail, as it had already determined that the Revenue's classification under CTH 8311 9000 was incorrect. However, the Tribunal acknowledged that the alternate classification proposed by the appellant appeared prima facie correct. Conclusion: The Tribunal concluded that the Bronze Cladding Panels should not be classified under CTH 8311 9000, as argued by the Revenue, but rather under CTH 8306 2110 as claimed by the appellant. The Tribunal quashed the Show Cause Notice and the adjudication order, setting aside the demand for differential IGST, interest, and penalties. The appeal was allowed with consequential relief as per the law.
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