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2024 (12) TMI 685 - HC - CustomsEntitlement to exemption under N/N. 24/2005 dated 1st March, 2005 - Classification of imported goods - It is the Petitioner s grievance that despite the issue of classification having been settled in favour of the Petitioner, the Revenue Department is insisting on goods being released provisionally subject to Petitioner s furnishing of bonds - pending appeal before Supreme Court - HELD THAT - There is no other ground urged by the Department except the fact that the appeal is pending before the Hon ble Supreme Court for the CESTAT order dated 18th December, 2023 2024 (1) TMI 683 - CESTAT MUMBAI . In the opinion of this Court, the mere pendency of the appeal would not entail the department to insist on provisional assessment of the goods. Since there is no stay of the order of CESTAT, the goods would have to be released in terms of the CESTAT order dated 18th December 2023 as per the classification as directed by the CESTAT i.e., CTH 851770 - the Petitioner shall be entitled to seek release of goods as per the CESTAT order, subject to the final decision of the Supreme Court in the pending Appeal and any directions that may be issued therein, which would have to be complied with. The writ petition is disposed of.
Issues:
Classification of imported goods under Notification No. 24/2005, insistence on provisional assessment by Revenue Department despite CESTAT order, interpretation of Section 18 of the Customs Act, 1962, relevance of pending appeal before the Supreme Court. Classification of Imported Goods: The Petitioner, a company providing after-sales support services of telecommunication networking equipment, imported goods that were subject to investigation by the Directorate of Revenue Intelligence (DRI) for misclassification. Despite a favorable settlement of the classification issue in favor of the Petitioner, the Revenue Department insisted on provisional release subject to the Petitioner furnishing bonds. The Petitioner claimed entitlement to exemption under Notification No. 24/2005, which was contested by the DRI. Insistence on Provisional Assessment: A show cause notice was issued, demanding a substantial amount, and a statutory appeal was filed before the Customs Excise and Service Tax Appellate Tribunal (CESTAT). The CESTAT, in its order, clarified the classification of the imported goods under CTH 851770 instead of CTH 85176290. Despite this order, the Petitioner faced continued insistence on provisional assessment by the DRI for over 400 bills of entry, causing delays and procedural hurdles. Interpretation of Section 18 of the Customs Act, 1962: The Revenue Department justified its insistence on provisional assessment based on Section 18(1)(c) of the Customs Act, 1962, citing the pending appeal before the Supreme Court challenging the CESTAT order. However, the Court emphasized that the mere pendency of an appeal does not automatically warrant provisional assessment. The Court clarified that in the absence of a stay on the CESTAT order, goods should be released as per the CESTAT classification, subject to the final judgment of the Supreme Court. Relevance of Pending Appeal Before the Supreme Court: The Court held that the Petitioner should be entitled to seek the release of goods as per the CESTAT order, notwithstanding the pending appeal before the Supreme Court. The release of goods was to be subject to the final decision of the Supreme Court in the pending appeal, and any subsequent directions issued by the Court would need to be complied with. The writ petition was disposed of accordingly, with pending applications also being resolved. In conclusion, the judgment addressed the classification of imported goods, the dispute over provisional assessment post-CESTAT order, the interpretation of Section 18 of the Customs Act, 1962, and the implications of the pending appeal before the Supreme Court on the release of goods.
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