2023 (6) TMI 17 - AT - Customs

Classification of imported goods - change in the stand of revenue during the appellate proceedings - Aluminium Tube for condenser - to be classified under CTH 7610 9030 or under CTH 7604? - whether the order of the First Appellate Authority is correct? - HELD THAT - From the definitions of adjudicating authority given in the statute, it is clear as to the role of an Adjudicating Authority, which term cannot include a Commissioner (Appeals). Rightly so, because the jurisdiction and scope of adjudication proceedings before an Adjudicating Authority is vast as compared to that of a Commissioner (Appeals). When an Adjudicating Authority issues Show Cause Notice after gathering information, from whatever sources, that becomes the foundation and the burden would lie on the noticee to whom such Show Cause Notice is issued, to reply to the Show Cause Notice. That is to say, such noticee becomes aware of the allegations against him and hence, noticee would reply by meeting all the points/allegations in the Show Cause Notice and if he so desires, he could even furnish all necessary supporting evidences. Then the case is adjudicated wherein the Adjudicating Authority would examine the merits in the response to the Show Cause Notice and the noticee could also have the benefit of personal hearing. After weighing and balancing the merits in the contentions of the noticee, the Adjudicating Authority proceeds to pass the Order-in-Original. After this, Section 128 of the Customs Act, 1962 could be pressed into service by any person who is aggrieved by the Order-in-Original. Here, in the case on hand, the respondent filed appeal feeling aggrieved, before the Commissioner (Appeals) against the Order-in-Original, but the Revenue did not prefer any appeal, which means that the order of classification passed by the Adjudicating Authority was accepted by the Revenue, or rather, the Revenue was not at all aggrieved by the Order-in-Original or even the classification - there are no grounds taken by the Revenue against the impugned order, as to there being any error of law committed by the First Appellate Authority. In effect, Revenue wants reversal of classification and Order-in-Original. The approach of the Revenue who have chosen to file the present appeal for the reasons that as and when the Order-in-Original was received, they slept over the matter and thus missed the bus. Secondly, having not exhausted the available opportunity, they have contended that the Commissioner (Appeals) should have, on his own, exercised power under Section 128A (3) which, according to us, does not stand - This is for the reason that there is no allegation against the Commissioner (Appeals) that he has not followed the procedure as prescribed under statute, nor has the Revenue found fault with the same. There are no reason to interfere with the order of the First Appellate Authority - appeal dismissed.

Summary

Issues Involved:
The Department challenges the First Appellate Authority's decision setting aside the Order-in-Original regarding the classification of imported goods declared as 'Aluminium Tube' for condenser under CTH 7604 2990. The dispute arises from the proposed re-classification under CTH 7610 9030, leading to a differential duty demand under Section 28(1) of the Customs Act, 1962.

Classification Issue:
The Adjudicating Authority determined that the goods were not classifiable under CTH 7604 or CTH 7608 as declared, but rather under CTH 7610 9030 due to their specialized use in the condenser core of an Air Conditioner. The First Appellate Authority, citing precedent, found that the goods did not fall under CTH 7608 and supported the respondent's classification under CTH 7604, ultimately setting aside the Order-in-Original.

Legal Interpretation and Jurisdiction:
The Tribunal analyzed the roles of the Adjudicating Authority and the Commissioner (Appeals) under the Customs Act, emphasizing the broader scope of adjudication proceedings compared to appellate proceedings. The Revenue's appeal sought to modify the Order-in-Original, but the Tribunal noted the lack of grounds for challenging the First Appellate Authority's decision and the inconsistency in the Revenue's stance, leading to the dismissal of the appeal.

Conclusion:
The Tribunal dismissed the appeal, finding no justification to interfere with the First Appellate Authority's decision. The Revenue's failure to challenge the original classification in a timely manner and the lack of legal basis for modifying the classification at the appellate stage were key factors in the dismissal of the appeal.