2019 (11) TMI 499 - AT - Customs

Classification of imported goods - Benefit of exemption - import of aluminous cement - only point of allegation that can sustain in the present case is that the assessee has wrongly classified the imported goods in their bills of entry - HELD THAT - The importer assessee is not an expert in classification of products and it is always possible that they claimed wrong classification. It is open for the department to direct the importer to correct classification or issue a show-cause notice proposing revision of classification. Merely claiming the wrong classification by itself does not amount to mis-declaration of the goods and there is nothing on record to show that the description of the goods in the Bill of entry and other documents as well as in the test report do not match - The department s case has to fail on this ground alone for the extended period of limitation and correspondingly the penalties also need to be set aside. Benefit of N/N. 21/02 - high alumina refractory cement classifiable under 2523 90 20 - HELD THAT - A plain reading of the notifications shows that the exemption is available for any high alumina cement falling under chapter 25. It does not distinguish between high alumina cement and low alumina cement. If the intention of the notification was to confine it to aluminous cement falling under a specific heading of the Customs Tariff, it would have said so - From the documents produced before us, there is no doubt that what is imported was aluminous cement (with high alumina content). Therefore, there is no doubt in our mind that what was imported was aluminous cement for the purpose of manufacture of refractory bricks. Therefore, the exemption Notification No. 21/2002 is fully available to the appellant - the demand on this count even within the normal period of limitation does not sustain. Confiscation of goods - penalties - HELD THAT - There was no mis-declaration at all and the appellant is entitled for the exemption notification in any case and there is nothing to be gained by the appellant by classifying their product under one heading or the other, the confiscation of the goods and imposition of penalties are also not sustainable. Consequently the personal penalties imposed on Shri Arun Kumar Giri and Shri Thumma Antony also need to be set aside. Appeal allowed - decided in favor of appellant.

Summary

Issues:
Classification of imported goods under different tariff headings, eligibility for exemption notification, mis-declaration of goods, imposition of penalties.

Classification of Imported Goods:
The appellant imported aluminous cement and claimed its classification under Chapter Heading 2523.30. The department contended that the cement should be classified as high alumina refractory cement under 2523 90 20 due to its high alumina content. The dispute pertained to the period 2006-2011. The appellant argued that their product was suitable for manufacturing refractory bricks due to its high alumina content, essential for this purpose. They consistently declared the alumina content in their documents and claimed exemption under Notification No. 21/2002. The Tribunal found that the goods were correctly classified as aluminous cement under Chapter 25, making them eligible for the exemption notification.

Mis-Declaration of Goods:
The department alleged that the appellant mis-declared the nature of the imported cement to avail an ineligible exemption notification. Samples were taken, investigations conducted, and statements recorded, leading to the conclusion that the appellant imported high alumina refractory cement but declared it as aluminous cement. However, the Tribunal found that the appellant's classification was not a mis-declaration but a possible error in classification, as they consistently declared the alumina content, and there was no evidence of mismatch in descriptions. The penalties imposed were set aside due to the lack of mis-declaration.

Eligibility for Exemption Notification:
The Tribunal analyzed if the appellant, importing high alumina refractory cement, could still avail the benefits of Notification No. 21/2002. It was determined that the exemption applied to any high alumina cement under Chapter 25 without distinguishing between high and low alumina content. Since the imported cement was aluminous with high alumina content, the exemption was deemed applicable, leading to the rejection of the demand within the normal period of limitation.

Imposition of Penalties:
As the Tribunal found no mis-declaration, upheld the eligibility for the exemption notification, and determined that the appellant gained nothing by classifying the product differently, the confiscation of goods and penalties were deemed unsustainable and set aside. Consequently, the personal penalties imposed on individuals associated with the importer were also revoked.

In conclusion, all three appeals were allowed, and the impugned orders were set aside, providing consequential relief as necessary. The judgment was pronounced on 21/06/2019 by the Appellate Tribunal CESTAT Hyderabad.