2025 (1) TMI 747 - AT - Customs

Classification of imported product Aluminium Formwork Materials - to be classified under CTH 84806000 or under CTH 76109010? - denial of benefit under S.No.610 of Notification No. 152/2009-CUS dt. 31.12.2009. Classification of imported product Aluminium Formwork Materials (AFM) - HELD THAT - An AFM which essentially is a shuttering to facilitate efficient and faster casting and therefore cannot ipso facto become mould. At this juncture, it is important to understand the difference between formwork and mould. Basically, a formwork is nothing but a shutter plate/shuttering material, which is temporary structure used to shape and support freshly poured concrete until it hardens and gains sufficient strength to support itself and the formwork can be used in different areas, including building foundations, where it is used to create the shape of foundation walls, footings and piers, walls and partitions, beams and columns, where it is used to shape columns, slabs, where it is used to create flat surface such as floors, roofs and bridge decks - The reliance placed by the Adjudicating Authority that it is customized and cannot be used or moved to other location is also misplaced. It is nobody s case that these formworks remain even after concretes were set in and that they were not removed and kept elsewhere for a similar use at a later date, if required. CTH 7610 covers, inter alia, aluminium structures and by way of example, it includes, inter alia, roofing frameworks. The roofing framework is therefore covered within CTH 7610 and therefore, it is necessary to understand what roofing framework is and how it is different from formwork. Roofing framework refers to structural element that supports a roof and, inter alia, provides structural support and also serves as a base for roofing material. In other words, it would be permanent structure as distinct from aluminium formwork - A complete immovable building structure cannot be called a blank or an article. The illustration also made it clear that mould would create blanks, articles, etc., including cement slabs but not the entire building or structure. In view of the HSN explanatory note, which clearly excludes structures and part of structures, which do not stay in place after construction and specific exclusion (b) which excludes coffering panels intended for pouring concrete having the character of mould from the purview of Chapter 76, came to the conclusion that the product imported by the appellant is rightly classifiable under CTH 8480. Admittedly, apart from this evidence, there is no other evidence like expert opinion or comparable imports, etc., to support the claim of the department that the goods are more in the nature of mould and not otherwise. On the other hand, CTH 7610 covers, inter alia, all kinds of aluminium structure except for the exclusion provided, i.e., mould falling under Chapter 84. Therefore, even if there is a mould made out of 100% aluminium also, it would be not classifiable under CTH 7610 and it will be falling under Chapter 84. However, when the product itself is not a mould then the exclusion will not be applicable. The same heading also includes aluminium plates, rods, profiles, tubes and the like, prepared for use in structures. Therefore, if there is any ambiguity in a taxation provision, it is to be interpreted in favour of the subject/ assessee. However, when a tax exemption has to be interpreted, the benefit of doubt should go in favour of the Revenue. Thus, as the issue is not that of exemption and more of classification leading to demand of duty, this judgment would not help the cause of the department. In fact, going by the ratio, we find that since in this case, there could be grey area regarding coverage under Chapter 76, vis- -vis Chapter 84 due to various interpretations not emanating from the heading itself, the benefit of doubt should be given to the appellant and not to the Revenue. Denial of benefit of Notification - HELD THAT - This is a notification provided for concessional duty in respect of imports made from Republic of Korea. In the SCN or in the OIO, there is no specific discussion as to why this notification has been denied, whether it was on account of import not being considered as import from Korea or it was on account of the fact that it was not covered under S.No.610 of the notification. Therefore, in the absence of these details, the appellants were not given adequate opportunity to defend the eligibility for said notification and therefore, this denial is also not tenable. Conclusion - The product AFM imported by the appellant is rightly classifiable under CTH 76109090 and not under CTH 84806000, as confirmed by the Adjudicating Authority. Moreover, since there is no dispute as regards origin of the goods, therefore, once the goods are falling under CTH 7610, the same would be entitled for exemption notification 152/2009 dt. 31.12.2009 at S.No.610. Appeal allowed.

1. ISSUES PRESENTED and CONSIDERED

The core legal issues considered in this judgment are:

Whether the imported Aluminium Formwork Materials (AFM) should be classified under Customs Tariff Heading (CTH) 76109090 or CTH 84806000.
Whether the appellant is entitled to the benefit of Notification No. 152/2009-CUS under S.No.610.
Whether the denial of the exemption notification by the Adjudicating Authority was justified.
Whether the self-assessment of the Bill of Entry by the appellant can be challenged by the Revenue.
Whether the Adjudicating Authority exceeded the scope of the Show Cause Notice (SCN).

2. ISSUE-WISE DETAILED ANALYSIS

Classification of AFM under CTH 76109090 or CTH 84806000

Relevant legal framework and precedents: The classification dispute revolves around whether AFM should be classified as aluminium structures under CTH 7610 or as moulds for mineral materials under CTH 8480. The relevant Harmonized System of Nomenclature (HSN) explanatory notes and previous judgments, including Alcove Construction Pvt Ltd Vs CC and Tata Projects Ltd Vs CC, were considered.
Court's interpretation and reasoning: The Tribunal analyzed the nature and use of AFM, noting that it functions as a temporary support structure during construction and not as a mould that creates specific articles. The Tribunal emphasized the distinction between formwork and moulds, concluding that AFM serves as a support and not as a mould.
Key evidence and findings: The evidence included purchase contracts, photographs of AFM in use, and the appellant's statements. The Tribunal found that AFM is used temporarily to support concrete during construction and is not a permanent structure.
Application of law to facts: The Tribunal applied the HSN explanatory notes to determine that AFM does not fit the definition of moulds under CTH 8480.60, as it does not create repeated articles or blanks.
Treatment of competing arguments: The appellant argued that AFM is a temporary structure used for construction, while the Revenue argued it functions as a mould. The Tribunal sided with the appellant, emphasizing the temporary and reusable nature of AFM.
Conclusions: The Tribunal concluded that AFM is rightly classifiable under CTH 76109090 as an aluminium structure, not under CTH 84806000.

Entitlement to Exemption under Notification No. 152/2009-CUS

Relevant legal framework and precedents: The exemption under Notification No. 152/2009-CUS provides concessional duty rates for certain imports from South Korea.
Court's interpretation and reasoning: The Tribunal noted that the denial of the exemption was not adequately justified in the SCN or the Order-in-Original (OIO).
Key evidence and findings: The Tribunal found no specific reasons provided for denying the exemption, such as non-compliance with the notification conditions.
Application of law to facts: The Tribunal determined that since the goods were correctly classified under CTH 7610, the exemption should apply.
Treatment of competing arguments: The appellant argued that the denial was unjustified due to lack of reasons, while the Revenue failed to provide adequate justification.
Conclusions: The Tribunal held that the appellant is entitled to the exemption under Notification No. 152/2009-CUS.

Challenge to Self-Assessment of Bill of Entry

Relevant legal framework and precedents: The Tribunal referenced the judgment in Shri Rajib Saha Vs CC, which held that self-assessment by the importer cannot be challenged unless specifically appealed by the Revenue.
Court's interpretation and reasoning: The Tribunal found that the Revenue did not challenge the self-assessment of the Bill of Entry.
Key evidence and findings: The Tribunal noted the lack of any appeal or challenge by the Revenue against the self-assessment.
Application of law to facts: The Tribunal applied the precedent to determine that the demand is not sustainable.
Treatment of competing arguments: The appellant argued that the self-assessment stands unchallenged, while the Revenue did not provide contrary arguments.
Conclusions: The Tribunal concluded that the demand based on self-assessment is not sustainable.

Scope of Show Cause Notice

Relevant legal framework and precedents: The Tribunal considered whether the Adjudicating Authority exceeded the SCN's scope by denying the exemption without specific reasons.
Court's interpretation and reasoning: The Tribunal found that the denial of the exemption was beyond the SCN's scope, as no reasons were provided for the denial.
Key evidence and findings: The Tribunal noted the absence of specific reasons in the SCN for denying the exemption.
Application of law to facts: The Tribunal determined that the appellant was not given an opportunity to defend against the denial due to lack of reasons.
Treatment of competing arguments: The appellant argued that the denial was beyond the SCN's scope, while the Revenue did not provide adequate justification.
Conclusions: The Tribunal held that the denial of the exemption was not tenable.

3. SIGNIFICANT HOLDINGS

Preserve verbatim quotes of crucial legal reasoning: "An AFM which essentially is a shuttering to facilitate efficient and faster casting and therefore cannot ipso facto become mould."
Core principles established: The distinction between temporary formwork and permanent moulds is crucial in classification. The benefit of doubt in classification disputes should favor the assessee.
Final determinations on each issue: The Tribunal concluded that AFM is classifiable under CTH 76109090, the appellant is entitled to the exemption under Notification No. 152/2009-CUS, the self-assessment of the Bill of Entry stands unchallenged, and the denial of the exemption was beyond the SCN's scope.

The appeal was allowed with consequential benefits, and the Adjudicating Authority's order was set aside.

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