2024 (1) TMI 49 - AT - Customs

Classification of imported goods - Stainless Steel tube fitting Tees, Crosses - to be classified under the Customs Tariff Item (CTI) 7307 2200 which attract Basic Customs duty (BCD) @10% in terms of Serial No.377 of Notification No.050/2017-Customs dated 30.06.2017 or under CTI 7307 2900, attracting BCD @25% in terms of Serial No.377A of Notification dated 30.06.2017? HELD THAT - The Order-in-Appeal referred to in the impugned order, has been appealed against by the appellants before this Tribunal, which was disposed of by the Tribunal in BOMBAY FLUID SYSTEMS COMPONENTS PVT LTD VERSUS COMMISSIONER OF CUSTOMS (AIR CARGO IMPORT), MUMBAI 2023 (7) TMI 666 - CESTAT MUMBAI in setting aside the said order and allowing the appeal in favour of the appellants. While allowing the appeal, the Tribunal has held that for change in classification of threaded elbows and sleeves , the department had not examined the goods or scrutinized any documents pertaining to the imported goods. Further, it has also been held that HSN Explanatory Notes alone cannot be relied upon for classification of the goods differently. The said order was passed by the Tribunal by placing reliance on the judgements of the Hon ble Supreme Court, delivered in the case of HPL CHEMICALS LTD. VERSUS CCE, CHANDIGARH 2006 (4) TMI 1 - SUPREME COURT and HINDUSTAN FERODO LTD. VERSUS COLLECTOR OF CENTRAL EXCISE, BOMBAY 1996 (12) TMI 49 - SUPREME COURT . The ratio arrived at in the said relied upon judgements is to the effect that in case of change in classification of goods, the department has to produce proper evidence and discharge the burden of proof. The goods in question imported by the appellants are fittingly fall under the CTI 7307 2200 inasmuch as the description of the product submitted by the appellants clearly demonstrate that the same are treaded elbows, bends etc. The department has adopted conflicting stands insofar as the classification of the impugned goods are concerned inasmuch as in the case of another importer namely, M/s Bangalore Fluid System Components Pvt. Ltd., who had imported the identical goods from the very same supplier and classified the same under CTI 7307 2200, the same has not been objected to by the department at the time of assessing the B/Es. Therefore, it is evident that different Commissionerates have adopted conflicting stand in change of classification of the goods in question, which is not proper and justified in absence of proper substantiation on the basis of visual examination of the goods and/or verification of import documents, which admittedly has not been done in the present cases. There are no merits in the impugned orders, insofar as the classification of the goods in dispute was changed from CTI 7307 2200 to CTI 7307 2900 - the impugned order set aside - appeal allowed in favour of the appellants.

Summary

Issues involved: Classification of imported goods under Customs Tariff Item (CTI) 7307 2200 or CTI 7307 2900, conflicting classification stands by different Commissionerates, reliance on HSN Explanatory Notes for classification, burden of proof on department for change in classification.

Summary:

Classification Dispute:
The appellants filed Bills of Entry for imported goods classified under CTI 7307 2200, while the department re-assessed them under CTI 7307 2900. The Commissioner (Appeals) upheld the department's classification, leading to the appeals before the Tribunal. The impugned order relied on Explanatory Notes to conclude the classification under CTI 7307 29, referring to a previous order confirming the classification. However, a previous Tribunal order favored the appellants, emphasizing the department's lack of examination of goods and reliance solely on HSN Explanatory Notes for classification.

Visual Examination and Evidence:
The Tribunal found the imported goods to fall under CTI 7307 2200 as they were demonstrated to be threaded elbows and bends. Pictorial representations and commercial invoices supported this classification. Notably, another importer faced no objections for classifying identical goods under CTI 7307 2200, indicating conflicting stands by different Commissionerates without proper verification of goods or import documents.

Precedent and Consistency:
Referring to a previous Tribunal order in the appellants' favor, the Tribunal highlighted the lack of stay or overruling by higher judicial forums. With similar facts in both cases, the Tribunal maintained consistency and did not alter the classification, ultimately setting aside the impugned orders and allowing the appeals in favor of the appellants.

Conclusion:
The Tribunal found no merit in changing the classification from CTI 7307 2200 to CTI 7307 2900, emphasizing the lack of proper substantiation and conflicting stands by different Commissionerates. By upholding the appellants' classification, the Tribunal allowed the appeals, maintaining consistency with previous orders.