2023 (1) TMI 1060 - HC - Customs

Change in classification - buttons imported as snap buttons - consideration changed from Sl.Nos.232 to 282 - argument of petitioners is that the change of expression in Sl.No.282 of Notification No.12 of 2012 is not the deciding factor and the deciding factor is whether the entry under which the import has been permitted, and exemption has been extended continues to be in operation even under Notification No.12 of 2012 - HELD THAT - The answer to the said question will not invite long deliberation. It may be noticed and recorded from the exhibits filed by the petitioner in the writ petition that the petitioner continues to import snap buttons. The product imported by the petitioners under the subject bills of entry is not claimed as stated differently from the goods imported by the petitioner in the first round of litigation. After appreciating the entries in Notification No.21 of 2002, the snap buttons imported by the petitioners by claiming exemption under the said notification, the adjudication as a matter of fact by this Court and confirmation by the Supreme Court, we are convinced that there is no disputed question of fact for verification by the appellate authority vis-a-vis the subject Bills of Entry and relegating the petitioners to work out the remedy of appeal. Even other at this point of time such course is avoidable and unnecessary both from the point of view of the importer and the department. Hence, the judgment under appeal needs to be set aside, and accordingly, set aside and the Writ Petition stands allowed. However, it is made clear that the relief granted to the petitioners shall be limited to the subject consignments. The revenue is free to examine each one of the consignments imported by the petitioners and verify whether the product imported by the petitioners as a fact would fall within the same category of product considered by this Court.

Issues Involved:
1. Classification of imported goods (buttons/snap buttons vs. fasteners).
2. Applicability of exemption under Notification No.21/2002 and Notification No.12/2012.
3. Legality of reclassification by the revenue department.
4. Jurisdiction and discretion of the court in adjudicating the classification dispute.

Issue-wise Detailed Analysis:

1. Classification of Imported Goods:
The primary issue revolves around the classification of the imported goods by the petitioners, specifically whether the imported items are "buttons/snap buttons" or "fasteners." The petitioners argued that their imported goods should be classified under Sl.No.140 of Notification No.21/2002, which pertains to "buttons/snap buttons," and thus be eligible for exemption from customs duty. The department, however, contended that the goods fall under Sl.No.167 of Notification No.21/2002, classifying them as "fasteners," and thus not eligible for the same exemption.

2. Applicability of Exemption under Notification No.21/2002 and Notification No.12/2012:
The petitioners had previously succeeded in getting their goods classified as "buttons/snap buttons" under Sl.No.140 of Notification No.21/2002 through a CESTAT ruling, which was upheld by higher courts, including the Supreme Court. However, with the introduction of Notification No.12/2012, the department reclassified the goods under Sl.No.282, arguing that the new notification changes the applicable classification. The court examined whether the earlier classification and exemption under Notification No.21/2002 should extend to the new Notification No.12/2012.

3. Legality of Reclassification by the Revenue Department:
The petitioners challenged the revenue department's orders dated 2.5.2013, 3.5.2013, and 21.06.2013, which demanded customs duty based on the reclassification of the goods as "fasteners" under Sl.No.282 of Notification No.12/2012. The court noted that the goods imported by the petitioners had not changed in nature or description from the earlier adjudicated cases. Therefore, the court found that the reclassification by the department was not justified and contrary to the earlier judgments.

4. Jurisdiction and Discretion of the Court in Adjudicating the Classification Dispute:
The single judge had dismissed the writ petition, suggesting that the matter required verification by customs authorities and that the petitioners should seek remedy through an appeal. However, the appellate court found that there was no significant difference in the goods previously adjudicated and those currently under dispute. The court held that it was unnecessary to subject the petitioners to further adjudication since the nature of the goods and their classification had already been established in earlier litigation. The court emphasized that the relief granted should be limited to the consignments in question and that the revenue department retains the right to verify future consignments.

Conclusion:
The court concluded that the goods imported by the petitioners should continue to be classified under the exemption provided in Notification No.21/2002 and its equivalent in Notification No.12/2012. The writ petition was allowed, setting aside the impugned judgment and the orders demanding customs duty. However, the court clarified that this relief is specific to the consignments in question, and the revenue department is free to examine future consignments to ensure compliance with the applicable notifications.

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