2019 (11) TMI 129 - AT - Customs

Valuation of imported goods - import of multiplexers, satellite receivers, test and measurement equipments, computers, software and rack - rejection of declared value - items together constituted Headend for Cable TV operations - classification of the item - whether classifiable under heading 85438999 or not - inclusion of freight and insurance charges in assessable value - HELD THAT - The issue is squarely covered by the decision of CESTAT Delhi bench in the appellants own case BRIGADIER R DESHPANDE, M/S. INDUSIND MEDIA COMMUNICATION. LTD. VERSUS COMMISSIONER OF CUSTOMS, NEW DELHI 2017 (11) TMI 1343 - CESTAT NEW DELHI where it was held that the imported goods are rightly classifiable under 8525. It is evident that exactly identical imports were affected by the appellants from Delhi and Mumbai. Even the quantities, unit value and FOB value as per the six invoices filed in respect of the imports made at Delhi and Mumbai was identical. Hence the issue as decided by the tribunal in case of Delhi imports will squarely cover the imports made at Mumbai. Since we find that the issue is squarely covered by the said decision in case of appellant themselves we follow the said decision and remand the matter back to adjudicating authority for re-computation of differential duty and penalties to be imposed in light of re-computed duty liabilities - appeal allowed by way of remand.

Issues Involved:

1. Classification of imported goods.
2. Valuation of imported goods.
3. Provisional assessment and finalization.
4. Demand for differential duty.
5. Confiscation of goods.
6. Imposition of penalties.
7. Appropriation of deposited differential duty.

Detailed Analysis:

1. Classification of Imported Goods:
The classification of the imported goods was a primary issue. The Commissioner classified the goods under Customs Tariff Item 85438999, treating them collectively as a "Headend" for Cable TV operations, based on Chapter Note 5(E) to Chapter 84 read with Section Note 4 to Section XVI. The appellants argued that the term "Headend" is not specified in the Customs Tariff and that the goods should be classified individually under specific entries in Chapter 84 and 85, rather than the residuary entry 85438999. The Tribunal referred to a similar case adjudicated by the CESTAT Delhi Bench, which classified such goods under Heading 8525 as transmission apparatus, not under 8543. Consequently, the Tribunal ordered the classification of the imported goods under 8525.

2. Valuation of Imported Goods:
The valuation issue involved the inclusion of software and service charges in the assessable value. The Commissioner added amounts for software, service charges, and freight and insurance to the declared value. The appellants contended that the revised offer and purchase orders should be considered, and discounts provided by the supplier should be proportionately distributed. The Tribunal upheld the inclusion of software and service charges in the assessable value, following the Customs Valuation (Determination of Value of Imported Goods) Rules, 2007, particularly Rule 10.

3. Provisional Assessment and Finalization:
The provisional assessment was made based on a bond and bank guarantee, with goods released provisionally. The final assessment was based on the revised assessable value and classification as ordered by the Commissioner. The Tribunal directed the re-computation of the differential duty based on the correct classification under Heading 8525.

4. Demand for Differential Duty:
The Commissioner confirmed a demand for differential duty amounting to ?39,64,911/-. The Tribunal, however, remanded the matter back to the adjudicating authority for re-computation of the differential duty in light of the revised classification and valuation.

5. Confiscation of Goods:
The goods imported under the Bill of Entry were confiscated under section 111(m) of the Customs Act, 1962. The appellants were ordered to pay a redemption fine of ?10,00,000/- since the goods were already released. The Tribunal upheld the confiscation but directed re-quantification of the duty and penalties.

6. Imposition of Penalties:
Penalties were imposed under sections 112(a) and 114AA of the Customs Act on the appellants and the Vice President Technical. The Tribunal directed the adjudicating authority to re-compute the penalties in light of the re-quantified duty liabilities.

7. Appropriation of Deposited Differential Duty:
The differential duty of ?54,19,475/- deposited at the time of provisional release was appropriated towards the differential duty, fine, and penalty payable by the appellants. The Tribunal ordered the re-computation of the amounts to be appropriated.

Conclusion:
The Tribunal found that the issues were covered by a prior decision of the CESTAT Delhi Bench in the appellants' own case. It remanded the matter back to the adjudicating authority for re-computation of the differential duty and penalties, following the correct classification under Heading 8525 and the inclusion of software and service charges in the assessable value. The impugned order was modified, and the appeals were allowed by way of remand for re-quantification of duty and penalties.

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