2022 (9) TMI 325 - AT - Customs

Classification of imported goods - TV tuners - to be classified under tariff item 8473 3099 of First Schedule to Customs Tariff Act, 1975 or under tariff item 8528 7100 of First Schedule to the Customs Tariff Act, 1975 - confiscation - redemption fine - penalty - HELD THAT - There is no doubt that the Central Board of Excise Customs is empowered to issue circulars under the authority of section 151A for the purpose of uniformity in the classification of goods or with respect to levy of duty thereon. However, the said authority is circumscribed by proviso which debars directing of officers of customs to make a particular assessment or to dispose off a particular case in a particular manner. Furthermore, there is also an embargo on instructions which have the effect of interference with the discretion of Commissioner of Customs (Appeals) in the exercise of appellate function. Thus the said circular has the effect of binding the original authorities while permitting the appellate authorities under the administrative control of Central Board of Excise Customs to take varying stands. The decision in COMPUAGE INFOCOM LTD. VERSUS COMMISSIONER OF CUSTOMS (SEAPORT-IMPORT) CHENNAI 2017 (11) TMI 1439 - CESTAT CHENNAI laid down the principle that parts which are to be used principally with computers should rightly be classified under the appropriate tariff item within heading 8473 of the First Schedule to the Customs Tariff Act, 1975. Appeal allowed - decided in favor of appellant-assessee.

Summary

Issues:
Classification of imported goods under Customs Tariff Act, 1975 - Applicability of notification no. 24/2005-Cus - Confiscation of goods - Penalty under Customs Act, 1962 - Interpretation of 'TV tuners' - Reliance on circulars for adjudication - Precedent set by previous Tribunal decisions.

Classification of Imported Goods:
The case involved the classification of imported goods, specifically 'TV tuners,' under the Customs Tariff Act, 1975. The dispute arose regarding the correct tariff item for these goods, with the appellant claiming coverage under tariff item 8473 3099 for duty exemption. However, the Customs authority revised the classification to tariff item 8528 7100, resulting in a significant differential duty amount.

Confiscation and Penalty:
In addition to the duty dispute, goods valued at Rs.14,35,282 were confiscated under section 111(m) of the Customs Act, 1962, with an option for payment of a fine. Furthermore, a penalty of Rs.10,00,000 was imposed on the importer under section 112 of the Customs Act, 1962.

Interpretation of 'TV Tuners':
The appellant argued that the 'TV tuners' in question were not intended for use with televisions but rather for enabling computers to receive television signals for further processing by the CPU. The appellant contended that the Customs authority's reliance on a specific circular for adjudication was based on an incorrect understanding of the technology involved.

Reliance on Circulars and Precedent:
Both parties presented arguments based on circulars and previous Tribunal decisions. The appellant highlighted a circular from the Central Board of Excise & Customs, while the Authorized Representative referenced Explanatory Notes from the World Customs Organisation. The appellant also cited a previous Tribunal decision involving a similar issue, emphasizing the classification of parts used principally with computers under the appropriate tariff item.

Judgment:
The Tribunal found that the Customs authority's reliance on the circular from the Central Board of Excise & Customs was not acceptable, as it could lead to uncertainty in classification. The Tribunal emphasized that circulars should not interfere with the discretion of appellate authorities. Relying on precedent, the Tribunal set aside the impugned order, allowing the appeal of the assessee-appellant and dismissing the Revenue's appeal.

This detailed analysis of the judgment highlights the key issues, arguments presented, and the Tribunal's reasoning leading to the final decision in the case.