2022 (1) TMI 466 - AT - Customs

Smuggling - goods /gold is classified under chapter heading 71081300 - import of baggage by a passenger coming from abroad - applicable rate of tax is 12.5% or 35%? - HELD THAT - It is a case of town seizure, and further there is no evidence of the appellant having entered into India from a foreign country; admittedly, appellant was travelling from Bahraich to Barabanki by bus; thus, it is a case of town seizure; accordingly, it is held that the rate of duty for import of baggage is not applicable, and the duty is payable @ 12.5% for gold, falling under CTH 71081300. The appellant is entitled to refund of the excess amount of duty deposited, alongwith applicable interest, from the date of deposit till the date of refund - appeal allowed - decided in favor of appellant.

Issues:
1. Applicability of the rate of duty on seized gold.
2. Classification of the seized gold under the Customs Tariff.
3. Calculation of duty payable on the seized gold.
4. Dispute regarding the rate of duty for import of baggage.
5. Determination of whether it is a case of town seizure.
6. Refund of excess duty deposited by the appellant.

Analysis:

Issue 1: Applicability of the rate of duty on seized gold
The appellant contested the imposition of a 35% duty rate by the Revenue, arguing that the correct rate should be 12.5% as per the applicable customs tariff heading. The appellant highlighted that the gold in question was not imported baggage but a case of town seizure. The Tribunal agreed with the appellant, ruling that the rate of duty for import of baggage was not applicable, and the duty should be calculated at 12.5% for gold under CTH 71081300.

Issue 2: Classification of the seized gold under the Customs Tariff
The appellant and the Revenue disagreed on the classification of the seized gold under the Customs Tariff. The appellant argued that the gold fell under chapter heading 71081300, while the Revenue applied the rate of duty for baggage imports. The Tribunal determined that the seized gold was correctly classifiable under chapter heading 71081300, and the duty rate should be 12.5%.

Issue 3: Calculation of duty payable on the seized gold
The appellant calculated the duty payable at 12.5% plus 3% IGST levy, amounting to ?9,13,635 on the assessed value. The Tribunal accepted the appellant's calculation and directed the refund of the excess duty deposited, along with applicable interest, within 8 weeks.

Issue 4: Dispute regarding the rate of duty for import of baggage
The Revenue relied on the calculation by the learned Commissioner, arguing for the application of the 35% duty rate for baggage imports. However, the Tribunal found that this rate was not applicable in the case of town seizure and upheld the appellant's contention for a 12.5% duty rate.

Issue 5: Determination of whether it is a case of town seizure
After considering the contentions of both parties, the Tribunal concluded that it was indeed a case of town seizure, as there was no evidence of the appellant entering India from a foreign country. The appellant was traveling domestically from Bahraich to Barabanki, further supporting the classification as a town seizure.

Issue 6: Refund of excess duty deposited by the appellant
The Tribunal allowed the appeal, granting the appellant the refund of the excess duty deposited, along with applicable interest, within 8 weeks of the order. This decision provided consequential benefits to the appellant, ensuring justice in the matter.

In conclusion, the Tribunal's detailed analysis and ruling clarified the correct rate of duty, classification, and calculation for the seized gold, emphasizing the distinction between town seizure and baggage imports in determining the applicable duty rate. The decision favored the appellant, directing the refund of excess duty deposited and providing relief in line with the legal provisions and customs tariff specifications.

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