2024 (2) TMI 29 - AT - Customs

Time limitation for issuance of SCN - demand involved is for the imports of Crane and Grab vide Bills of Entry No.147807 dated 04.02.2010 and No. 149946 dated 18.03.2010, whereas the demand SCN No. S/43-03/SIIB/2012-13 was issued on 29.01.2014 - HELD THAT - The SCN dated 29-01-2014 and orders thereon have relied upon the Explanatory Notes which are only for official use by Officers for general guidance, but they are not accessible to the general public and they are also not in chapter notes under chapter 89 for 8905. As per the provisions of Customs Act, 1962 read with CBEC s Customs Manual, determination of correct rate of duty based on correct classification was fasten on the proper officer of the Customs prior to self assessment era before 08-04-2011. Therefore, when such explanatory Notes were not taken into consideration or followed inadvertently or otherwise for the said imports of Crane and Grab vide Bills of Entry No.147807 dated 04.02.2010 and No. 149946 dated 18.03.2010, Appellant alone cannot be held responsible for suppression of the facts or Appellant has deliberately mis-classified goods in order to evade payment of the customs duty, when all relevant information and documents are submitted by the Appellant while filling the said Bill of Entry, in question. It is settled position in law that unless allegation of suppression of facts or mis-statement with intention to evade payment of duty is supported by credible or clinching independent evidence, the same cannot be sustained merely on unsustainable allegations. This being a case of interpretation regarding classification of imported crane and Grab, in absence of any clinching evidence to evade payment of duty, charge of suppression of facts, willful misstatement, fraud, etc., cannot be levelled, for initiation of SCN beyond the normal time limitation. Extended period cannot be invoked in every case of short payment of duty, but only in cases of wilful and deliberate suppression of fact having element of deception or malpractice is required to prove wilful and deliberate suppression of fact with intent to evade duty and this is not the case of wilful/deliberate suppression. It is settled law that there must be deliberate attempt by Appellant to suppress facts from Department with intention to evade payment of customs duty, which is not existing in facts of this case. Merely change in view by another authority after clearance of goods regarding classification, cannot be held against the appellant as view of assessee was also based on documents and it was approved by the authorities, when the Bill of Entry was assessed and the said goods were allowed clearance for home consumption. It is found that the various decisions of the tribunal hold such view. Consequently, extended period under Section 28(4) of the Customs Act, 1962 cannot be legally invoked in the SCN or upheld subsequently. Accordingly, since duty demand is not sustainable, consequential imposition of interest, fine and penalties on appellant under provisions of Customs Act 1962 shall also not be sustainable. The duty demand is clearly hit by Time limitation. Since the entire demand is under extended period, the impugned order is set aside by setting aside the entire duty demand and consequential imposition of interest, fine and penalties. The appeal is allowed only on the ground of time bar.

Summary

Issues Involved:
1. Validity of invoking the extended period under Section 28 of the Customs Act, 1962.
2. Allegations of willful misclassification and suppression of facts.
3. Legality of the demand for differential duty, interest, penalty, and redemption fine.

Summary:

1. Validity of Invoking the Extended Period:
The appellant argued that the extended period for issuing the Show Cause Notice (SCN) was improperly invoked, as the matter had already been investigated by the Directorate of Revenue Intelligence (DRI) for all four Bills of Entry, and no SCN was issued for two of them. The Tribunal found that the demand involved was for imports vide Bills of Entry No. 147807 dated 04.02.2010 and No. 149946 dated 18.03.2010, while the SCN was issued on 29.01.2014, thus falling under the extended period. The Tribunal held that the extended period could not be invoked as there was no deliberate suppression of facts or willful misstatement by the appellant.

2. Allegations of Willful Misclassification and Suppression of Facts:
The appellant contended that there was no willful misclassification or suppression of facts, as all relevant documents were submitted at the time of import, and the goods were cleared after proper examination by customs authorities. The Tribunal noted that the SCN and orders relied on Explanatory Notes, which are not accessible to the public and not part of the chapter notes under chapter 89. The Tribunal concluded that the appellant could not be held responsible for any alleged misclassification, as the proper officer of customs was responsible for determining the correct rate of duty.

3. Legality of the Demand for Differential Duty, Interest, Penalty, and Redemption Fine:
The Tribunal observed that the SCN dated 29-01-2014 and the subsequent orders were not supported by any new documentary evidence to establish suppression of facts or misstatement. The Tribunal emphasized that the burden of proving the correct classification of goods lies with the revenue, and in the absence of any clinching evidence, the charge of suppression of facts could not be sustained. Consequently, the Tribunal held that the extended period under Section 28(4) of the Customs Act, 1962, could not be legally invoked, and the entire demand was hit by time limitation.

Conclusion:
The Tribunal set aside the impugned order, including the duty demand, interest, fine, and penalties, on the ground of time bar. The appeal was allowed with consequential relief as per law.