2024 (5) TMI 430 - AT - Customs

Classification of imported goods - plastic bottle stick toys/plastic bubble stick toys were being imported in Semi Knock Down condition (SKD) - to be classified as plastic toys under CTH 95030030 or not - Waiver of the demurrage / detention charges - wilful mis-declaration of the goods or not - invocation of larger period of limitation under Section 28(4) of the Customs Act, 1962 - HELD THAT - The specific import policy perhaps restricts the import of plastic toys and therefore, to prevent the import of the same, the duty liability is pegged at 60%. So, just because the goods were imported in semi knock down condition, does not by itself carve out an exception. The point therefore to be considered is the import and not what happens thereafter, that is, whether the parts are sold as it is or in assembled condition. The appellant has heavily relied upon the earlier imports to contend that they were all being in the nature of contemporaneous imports, the assessments of which had become final since the revenue had accepted the declared goods as such. It is a well settled principle that there is no res judicata in tax matters; if that was a mistake on the part of the revenue, then a mistake committed once cannot perpetuate forever, and in any case, it is always open for the department to have a fresh look at each import to assess the goods imported, properly. Waiver of the demurrage / detention charges - HELD THAT - The same was not an issue before the original authority but was taken up before the High Court in 2022 (1) TMI 575 - MADRAS HIGH COURT . However, there is no order by the Hon ble High Court in this regard. Moreover, this being a case of willful misdeclaration of the imported goods, it is not found proper to interfere with the demurrage/detention charges if any, payable by the appellant, if any. Even otherwise, this ground is not arising out of the impugned order. Extended period of limitation - wilful mis-declaration or not - HELD THAT - It is a case of mis-declaration obviously to avail the benefit of lesser Basic Customs Duty. Further, in the show-cause notice itself, the original authority recorded the modus operandi and brought out on record that to evade import duty thereby bypass compulsory compliance of Toys (Quality Control Order), 2020 and Policy Condition No.2 to Chapter 95 of ITC(HS) 2017-Schedule 1 (Import Policy), the goods were imported in parts only, in semi knock down condition by the appellant; the importer has evaded duty and compulsory Bureau of Indian Standards (BIS) certification compliance by suppression of facts. From the above observation, it is clear that the mis-declaration was only to evade duty, which is clearly hit by the Section 28(4) ibid. Thus, the demand within the meaning of Section 28(4) is just and proper and hence, the this issue is also answered against the appellant. There are no merit in the appeal - appeal dismissed.

Summary

Issues:
The issues to be decided in this case are:
(i) Whether the revenue was justified in classifying the imported goods as plastic toys under CTH 95030030?
(ii) Whether there was willful mis-declaration of the goods whereby the larger period of limitation under Section 28(4) of the Customs Act, 1962 can be invoked?

Summary:
The appellant imported goods declared as Plastic Bottle Stick and Accessories, Soap Water Solution, and Whistle, which were investigated by the Special Investigation and Intelligence Branch due to suspected misdeclaration. The revenue classified the goods as plastic toys attracting higher duty, leading to a show-cause notice and penalties imposed by the Original authority. The appellant challenged this decision, leading to the present appeal.

The appellant claimed to be a trader of parts, not toys, but evidence suggested otherwise. The revenue obtained an opinion confirming the goods as parts of plastic toys. The appellant failed to explain the usage of the imported parts, and the revenue argued that incomplete articles with essential characteristics of the finished product should be classified as such.

The import policy restricted plastic toys import, justifying the higher duty. The appellant's reliance on past imports was rejected, emphasizing the need for proper assessment in each case. The misdeclaration was deemed willful to evade duty and comply with quality control regulations, justifying the demand under Section 28(4) of the Customs Act.

The Tribunal dismissed the appeal, upholding the classification of goods as plastic toys and the invocation of Section 28(4) due to willful misdeclaration.

In conclusion, the Tribunal found no merit in the appeal and upheld the decision of the revenue authorities.