2023 (7) TMI 588 - AT - Customs

Classification of imported goods - Ext. Hard disc drives/Hard Disc Drives - to be classified under CETH 84717020 as hard disc drives or should have been classified under CETH 84717030 as removable or exchangeable disc drives - eligibility for benefit under Sr. No.17 of exemption Notification No. 06/2006-CE dated 01.03.2006 till 16.03.2012 and thereafter under Sr. No. 255 of Notification No. 12/2012-CE dated 17.03.2012 - HELD THAT - The issue is squarely covered by the decision of the Tribunal in the case of Supertron Electronics Pvt. Ltd. 2017 (1) TMI 1529 - CESTAT NEW DELHI where it was held that we note that the exemption notification specifies tariff heading up to six digits only, 8471 70, which covers both, hard disk drive and removable or exchangeable disk drives. Further, the next column of the table for description explain the goods only as hard disk drive among many other items. On careful consideration of the technical specification furnished, and the sample of imported items along with tariff entries and the exemption notification, we are in agreement with the findings in the impugned order. The terms hard disk drive used in the notification has not been amplified either by adding external or internal . On this simple premise alone, exemption to the said item cannot be denied. Chennai Bench of the Tribunal vide final order No.42907/2018 dated 16.11.2018 in appellant s own case 2019 (2) TMI 264 - CESTAT CHENNAI held that This Tribunal in the case of M/s. Fortune Marketing Pvt. Ltd., vide Final Order, dated 24.08.2017 2017 (8) TMI 1506 - CESTAT CHENNAI has already decided the issue in favour of the assessee. As the issue is squarely covered by the above decision, there are no merits in the impugned order - appeal allowed.

Issues Involved:

1. Classification of imported goods.
2. Eligibility for exemption from payment of Countervailing Duty (CVD).
3. Demand for additional duty of customs (CVD) and associated levies.
4. Confirmation of interest on unpaid customs duties.
5. Appropriation of amounts voluntarily paid during investigation.
6. Liability for confiscation of goods.
7. Imposition of penalty under Section 114A of the Customs Act, 1962.

Detailed Analysis:

1. Classification of Imported Goods:

The primary issue was the classification of 'Ext. Hard disc drives'/ 'Hard Disc Drives' imported by the appellant. The Revenue argued that the goods should be classified under tariff item 84717030 as 'Removable or exchangeable disc drives' instead of tariff item 84717020 as 'hard disc drives'. This reclassification led to the denial of certain exemptions and imposition of higher duties.

2. Eligibility for Exemption from Payment of CVD:

The appellant claimed exemptions under Notification No. 06/2006-CE dated 01.03.2006 and Notification No. 12/2012-CE dated 17.03.2012. The Revenue denied these exemptions based on the reclassification of the goods. The Tribunal, however, found that the goods should be classified as 'hard disc drives' eligible for the exemptions, referencing technical opinions and previous judgments, including the case of Supertron Electronics Pvt. Ltd.

3. Demand for Additional Duty of Customs (CVD) and Associated Levies:

The Commissioner confirmed the demand for additional duty of customs (CVD) at rates of 10% and 12% for different periods, along with Education Cess, Secondary & Higher Secondary Education Cess, and Special Additional Duty (SAD). The Tribunal, referencing previous decisions and technical opinions, found that the goods were correctly classified under the tariff item eligible for lower duties, thus negating the higher demands.

4. Confirmation of Interest on Unpaid Customs Duties:

The Commissioner confirmed the demand for interest on the unpaid customs duties under Section 28AB/28AA of the Customs Act, 1962. The Tribunal's decision to reclassify the goods under the correct tariff item and grant the exemptions impacted the interest calculations, reducing the appellant's liability.

5. Appropriation of Amounts Voluntarily Paid During Investigation:

The amounts voluntarily paid by the appellant during the investigation were appropriated towards the customs duties, interest, and other dues. The Tribunal's decision to classify the goods correctly and grant exemptions affected the final amounts payable, leading to adjustments in the appropriated amounts.

6. Liability for Confiscation of Goods:

The Commissioner held the goods liable for confiscation under Section 111(m) of the Customs Act, 1962, but did not impose a redemption fine as the goods were not physically available. The Tribunal's reclassification and exemption decisions impacted the confiscation ruling, aligning it with the correct legal and factual context.

7. Imposition of Penalty under Section 114A of the Customs Act, 1962:

A penalty equal to the duty plus applicable interest was imposed on the appellant under Section 114A of the Customs Act, 1962. The Tribunal's decision to grant the exemptions and correctly classify the goods reduced the penalty amount, reflecting the revised duty and interest calculations.

Conclusion:

The Tribunal allowed the appeal, finding that the goods were correctly classified under the tariff item eligible for exemptions, referencing technical opinions and previous judgments. This decision impacted the demands for additional duties, interest, appropriated amounts, confiscation liability, and penalties, leading to a significant reduction in the appellant's liabilities. The Tribunal's comprehensive analysis and adherence to legal precedents ensured a fair and just resolution of the issues involved.

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