2019 (8) TMI 788 - HC - Customs

Classification of imported consignments - Relay - Automatic Regulating or Controlling Instruments and Apparatus' - Circular dated 18.07.2019 - It is the specific submission of learned counsel for writ petitioner that paragraph 5 of the said Circular takes the wind out of the sails qua the impugned order - HELD THAT - As there is no contest regarding the said circular and as the manner in which the said Board has read the order of Hon'ble Supreme Court in ASIAN RESURFACING OF ROAD AGENCY PVT. LTD. AND ANR. VERSUS CENTRAL BURUEAU OF INVESTIVATION 2018 (4) TMI 3 - SUPREME COURT , has not been put in issue in the instant case, this Court refrains itself from expressing any view or opinion about the said circular. Having said this, it is made clear that this question is left open to be decided in an appropriate case where there is contest about the manner in which said Board has understood the order of Hon'ble Supreme Court in Asian Resurfacing of Road Agency Private Limited case. Petition disposed off.

Summary

Issues involved:
Classification of imported consignments, imposition of customs duty, interest, and penalty, interpretation of circular issued by the Central Board of Indirect Taxes and Customs, applicability of Supreme Court judgment in ongoing cases with stay orders.

Classification of imported consignments:
The main issue in the judgment pertains to the classification of consignments imported by the writ petitioner. The petitioner claimed the product as 'Relay', while the Department classified it as 'Automatic Regulating or Controlling Instruments and Apparatus'. This classification discrepancy led to the imposition of customs duty, interest, and penalty by the Assistant Commissioner.

Imposition of customs duty, interest, and penalty:
The original adjudicating Authority, the Assistant Commissioner, imposed customs duty, interest, and penalty on the writ petitioner following the classification dispute. The petitioner challenged this order through a writ petition, which was dismissed by a single Judge of the High Court. Subsequently, an intra-court appeal was filed, and a Division Bench admitted the appeal and granted interim stay on the earlier order.

Interpretation of circular issued by the Central Board of Indirect Taxes and Customs:
A circular issued by the Central Board of Indirect Taxes and Customs provided guidance on the application of a Supreme Court judgment in cases with stay orders. The circular clarified that the judgment would apply to cases pending in Trial Courts only and directed the field formations on the appropriate approach to be followed in such situations.

Applicability of Supreme Court judgment in ongoing cases with stay orders:
The judgment discussed the conflicting interpretations of the Supreme Court judgment in the case of Asian Resurfacing of Road Agency Pvt. Ltd. v. Central Bureau of Investigation. The petitioner argued that a specific paragraph in the circular nullified a paragraph in the impugned order, leading to the setting aside of the demand notice issued by the second respondent. The Court refrained from expressing a view on the circular's interpretation but directed the setting aside of the notice based on the circular's operation.

In conclusion, the judgment disposed of the writ petition with directions to set aside the demand notice, while reserving the rights of the respondents to reissue the notice based on the outcome of the matter pending before the Division Bench. The Court emphasized that the question of interpreting the circular's application of the Supreme Court judgment would be left open for determination in a future case with a contesting issue.