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2023 (5) TMI 48 - AT - CustomsSeeking change in Classification of goods (different from one proposed in SCN) - Hot Rolled Flat Products - to be classified under heading 72199090 or under heading 72192141? - whether the goods are covered by the Notification No. 1/2013-Cus (SG) dated 14.01.2013 imposing safeguard duty on Hot Rolled Flat Products? - HELD THAT - The Hon ble Apex Court has considered practically identical issue in the case of WARNER HINDUSTAN LTD. VERSUS COLLECTOR OF CENTRAL EXCISE, HYDERABAD 1999 (8) TMI 75 - SUPREME COURT where it was held that The correct course for the tribunal to have followed was to have dismissed the appeal of the Excise Authorities making it clear that it was open to the Excise Authorities to issue a fresh show cause notice to the appellant on the basis that the tablets were classifiable under Heading 17.04 as items of confectionary. The claim of the Revenue that the adjudicating authority can classify the goods in a Customs Tariff Heading different from the one proposed in show cause notice, cannot be accepted - appeal of Revenue dismissed.
Issues involved:
The dispute involves the classification of goods under different headings in four bills of entry, specifically under headings 72199090, 72192141, 72191200, 72191300, and 72191400. The main issue revolves around the application of Notification No. 1/2013-Cus (SG) dated 14.01.2013 imposing safeguard duty on Hot Rolled Flat Products. Issue 1: Classification of goods beyond the show cause notice The original adjudicating authority classified the goods under headings different from what was proposed in the show cause notice, leading to an appeal by the respondent to the Commissioner (Appeals) and subsequently to the Tribunal. The Revenue challenged the Commissioner's decision, arguing that even if the tariff item is not correctly mentioned in the show cause notice, the demand can still be confirmed under a different tariff heading. Issue 2: Compliance with show cause notice The respondent contended that once a show cause notice proposes a particular classification, the adjudicating authority cannot classify the goods under a different classification without issuing a separate show cause notice within the permissible time. Citing the decision of the Hon'ble Apex Court in the case of Warner Hindustan Limited, the respondent emphasized the importance of adhering to the classification proposed in the show cause notice. Judgment: The Tribunal considered the arguments presented by both parties and referred to the decision of the Hon'ble Apex Court in the case of Warner Hindustan Limited. The Tribunal highlighted that it is impermissible for the adjudicating authority to classify goods under a Customs Tariff Heading different from the one proposed in the show cause notice. The Tribunal dismissed the appeal of the Revenue, emphasizing that the entire case of the Revenue cannot sustain due to the incorrect classification proposed. This decision aligns with the settled legal position that if goods are not classifiable under the chapter heading proposed by the revenue, the case of the department will fail. The Tribunal upheld the principle that the classification claimed by the appellant, even if debatable, will stand if the proposed classification by the Revenue is found to be inappropriate. This judgment underscores the significance of adhering to the classification proposed in the show cause notice and the consequences of deviating from it without issuing a separate notice. It also reaffirms the legal principle that the burden of proof lies with the Revenue to establish the correct classification of goods, failing which the classification declared by the appellants cannot be disturbed.
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