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2017 (1) TMI 1065 - AT - CustomsTime limitation - whether the service of notice to CHA can be considered as service of notice in terms of Section 28 of the Customs Act? - Held that - reliance placed in the case of COLLECTOR OF CUSTOMS, COCHIN Versus TRIVANDRUM RUBBER WORKS LTD. 1998 (11) TMI 127 - SUPREME COURT OF INDIA , where it was held that the service of notice to CHA cannot be considered as service of notice in terms of Section 28 of the Customs Act - the service of notice to CHA cannot be equated to the service of notice to the appellant . Hence we are of the view that no notice has been served on the appellant - demand hit by limitation clause - appeal allowed - decided in favor of appellant.
Issues: Classification of goods under CTH 3823 or CTH 3902, Service of demand notice under Section 28 of the Customs Act, 1962, Limitation period for demand notice
Classification of Goods under CTH 3823 or CTH 3902: The case involved the classification of cable filling compound Naptel imported by M/s. Vindhya Telelinks Ltd. The initial assessment classified the goods under CTH 3902 instead of CTH 3823, resulting in a demand for short levy under Section 142 of the Customs Act, 1962. The matter was taken to the Commissioner (Appeals) and the Tribunal twice, with a final confirmation of the demand on limitation and classification by the Commissioner. The appellant argued that the goods should be classified under Ch. Heading 3823, not 3902, as the latter specifically covers "polymers of polypropylene" only in primary form, while the product in question contained mixed crystalline substances in addition to the polymer. The Tribunal, after considering the submissions, found that the goods could not be held under CTH 3902 due to the presence of mixed crystalline substances, thereby supporting the appellant's argument for classification under CTH 3823. Service of Demand Notice under Section 28 of the Customs Act, 1962: The appellant contended that the demand notice issued to them was not valid under Section 28 of the Customs Act as it was served to the Clearing House Agent (CHA) and not directly to the appellant. The appellant relied on the decision of the Tribunal in the case of Krisons Electronics System Ltd. and the Hon'ble Apex Court's decision in the case of CC v. Trivandrum Rubber Works Ltd. to support their argument. The Tribunal, in agreement with the appellant's submission, emphasized that the service of notice to the CHA could not be equated with serving notice to the appellant. Citing the observations of the Hon'ble Apex Court, the Tribunal concluded that no valid notice had been served on the appellant, thereby rendering the demand notice invalid due to the incorrect service procedure. Limitation Period for Demand Notice: The Tribunal, while addressing the issue of the limitation period for the demand notice, highlighted that the demand was hit by the limitation clause due to the lack of proper service of notice to the appellant. Without delving into the merits of the case, the Tribunal ruled that since no valid notice had been served on the appellant within the prescribed period, the demand could not be sustained on limitation grounds. Consequently, the appeal was allowed, and the demand was deemed unsustainable based on the failure to serve a valid notice within the statutory time frame. In conclusion, the judgment by the Appellate Tribunal CESTAT MUMBAI primarily focused on the classification of goods, the service of demand notice under Section 28 of the Customs Act, and the limitation period for such notices. The decision favored the appellant by classifying the goods under CTH 3823, declaring the demand notice invalid due to improper service, and ruling the demand unsustainable based on the limitation clause.
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