2001 (6) TMI 135 - AT - Customs

Issues Involved:
1. Classification of imported goods under the correct tariff heading.
2. Determination of the correct value of imported goods for customs duty assessment.
3. Finalization of provisional assessments.
4. Demand of differential duty on spare parts imported since 1990.
5. Mis-declaration of goods for customs assessment.
6. Imposition of penalties under Section 112(a) & (b) of the Customs Act, 1962.

Issue-wise Detailed Analysis:

1. Classification of Imported Goods:
The primary issue revolves around the classification of "Inventory Filter Material" imported by M/s. MIPL. The goods were initially classified under Heading 8421.00 by the importer, which pertains to "Centrifuges, including Centrifugal dryers, filtering or purifying machinery and apparatus for liquids or gases." However, the Collector reclassified the goods under Heading 3920.79, which covers "Other plates, sheets, film foil & strip, of plastics non-cellulose and non-reinforced, laminated, supplied or similarly combined with other materials; of other cellulose derivatives."

The Tribunal found that the imported goods, described as "Membrane Filter Material in the form of Roll Stock," did not fit the description of parts under Heading 8421.00 as per the HSN notes. The goods were in roll form and not in the form of leaves, plates, or drums. The exclusion clause in the HSN notes for Heading 8421.00 excludes "filter elements," which the imported goods were admitted to be. Therefore, the Tribunal concluded that the goods could not be classified under Heading 8421.00 and required re-examination under Chapter 39 or Chapter 48 to determine if they were made of plastic materials.

2. Determination of the Correct Value of Imported Goods:
The issue of valuation arose from the discrepancy between the declared value and the actual value of goods imported by M/s. MIPL. The DRI officers found that M/s. MIPL received two sets of invoices from their supplier, with the higher value invoice being suppressed for customs assessment. The Collector initially accepted the lower value declared by the importer based on an SVB circular from Madras Customs House. However, the Tribunal found that the Collector did not independently determine the value based on the evidence on record. The Tribunal emphasized that the Collector should have made an independent determination of the value, considering all material evidence, and not solely relied on the SVB circular.

3. Finalization of Provisional Assessments:
The Collector's order included finalizing the provisional assessments of certain Bills of Entry based on the Investigation Order No. 120/92 issued by SVB, Madras. The Tribunal found that the Collector should have independently assessed the classification and valuation of the goods, rather than relying on the SVB circular. The matter was remanded for re-determination of classification and valuation.

4. Demand of Differential Duty on Spare Parts Imported Since 1990:
The show cause notice demanded differential duty on spare parts imported since 1990, alleging that they were imported at lower prices than those declared in earlier memorandums. The Tribunal directed that this issue be re-examined along with the classification and valuation issues in the de novo proceedings.

5. Mis-declaration of Goods for Customs Assessment:
The show cause notice also alleged that M/s. MIPL mis-declared the goods under a lower duty heading to evade customs duty. The Tribunal found that the Collector did not adequately address the classification issue for Bill of Entry No. 009557 dated 17-4-1993, where the goods were declared under Heading 3920.79. The Tribunal directed that the classification and valuation of the goods be re-determined, considering the correct tariff heading and value.

6. Imposition of Penalties under Section 112(a) & (b) of the Customs Act, 1962:
The Collector dropped further penal proceedings in the case. However, the Revenue appealed for penalties on M/s. MIPL and its Director for mis-declaration of value and classification. The Tribunal left the question of penalties open, to be decided in the de novo proceedings based on the re-determined classification and valuation.

Conclusion:
The Tribunal remanded the case for re-determination of classification and valuation of the imported goods, considering the correct tariff heading and value based on the evidence on record. The issues of differential duty demand, provisional assessment finalization, and penalties were also left open for re-examination in the de novo proceedings. The appeal was disposed of in these terms.

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