2024 (9) TMI 185 - AT - Customs

Time limitation - suppression of facts or not - classification of imported spectrometers - to be classified under CTH 90221900 or not - applicability of N/N. 24/2005-Cus dated 01.03.2005. Time Limitation - HELD THAT - There is no allegation of suppression of facts in the impugned orders. Appellant had made declaration as per the invoice/details provided by overseas supplier and there is no allegation of any fraud collusion or willful misstatement or suppression of facts to invoke the extended period of limitation. Thus the demand made against the goods imported against Bill of Entry No. 712110 dated 29.03.2008 by issuing a Show Cause Notice after 3(three) years and 9(nine) months and for the goods imported under the Bill of Entry No. 325535 dated 01.02.2010 by issuing SCN after 1(one) year and 10(ten) months is barred by limitation and impugned orders are unsustainable. Classification - HELD THAT - The issue of classification of the impugned imported goods is not decided as the issue is considered on limitation and it is found that the impugned order is unsustainable on limitation. Appeal allowed.

Summary

Issues:
Classification of spectrometers under Customs Tariff Heading, demand of duty, imposition of penalty, limitation period for issuing Show Cause Notice.

Analysis:

1. Classification of Spectrometers: The issue in the appeal pertains to the classification of spectrometers imported by the Appellant. Initially, the Appellant declared the items under Customs Tariff Heading (CTH) 90273010 and availed exemption under Notification No. 24/2005. However, a Show Cause Notice was later issued re-classifying the goods under CTH 90221900 due to the use of X-rays, attracting a higher duty rate not covered by the exemption. The demand for differential duty was raised, leading to the dispute.

2. Demand of Duty and Penalty: The Appellant contended that the demand of duty was time-barred, citing the delay in issuing the Show Cause Notice after import. They argued that no evidence of suppression of facts existed during import, thus invoking the extended period of limitation was not justified. The Adjudication Authority confirmed the duty demand and imposed a penalty under Section 114A of the Customs Act, which was upheld by the Commissioner (Appeals), leading to the present appeal.

3. Limitation Period for Show Cause Notice: The Appellant argued that the Show Cause Notice was issued after considerable delays, exceeding three years for some imports, and relied on legal precedents to support their contention. Citing a judgment of the Hon'ble High Court of Bombay, they emphasized that the extended period of limitation should only apply in cases involving fraud, collusion, or willful misstatement, which were absent in this scenario.

4. Merits of the Case: The Appellant maintained that they had provided accurate information at the time of import, supported by the manufacturer's catalogue and invoice. They highlighted that the proper officer accepted the declaration after assessment without conducting any investigation or recording statements from the Appellant. Referring to a Supreme Court judgment, they argued that the declaration was made in good faith and did not amount to misdeclaration under the Customs Act.

5. Decision: After considering the arguments and precedents cited, the Tribunal found that the demand of duty was indeed barred by limitation as there was no evidence of fraud or suppression of facts by the Appellant during import. The classification issue was not addressed as the limitation aspect rendered the impugned orders unsustainable. Consequently, the appeals were allowed, and any consequential relief was granted in accordance with the law.

This detailed analysis of the judgment highlights the key issues of classification, duty demand, penalty imposition, and limitation period for issuing the Show Cause Notice, providing a comprehensive understanding of the legal proceedings and the Tribunal's decision.