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2024 (3) TMI 194 - AT - CustomsDemand Duty - Mis-declaring imported goods Brush Cutters as Power Weeders - classifiable under CTH 8467 8990 and not under CTH 8432 2990 as claimed in the respective Bill of Entry - Applicability for Benefit of Notification 12/2012 - period of limitation - confiscation - redemption fine u/s 111(m) - Interest - Penalty - Personal penalty on CEO and Director u/s 112 114AA - HELD THAT - Coming to the classification of the brush cutter, this Bench in the case of Hikoki Power Tools India Pvt. Ltd. Ors. Vs. CC, Bangalore 2024 (3) TMI 137 - CESTAT BANGALORE has already decided considering the CTH 8432 / 8433 and 8467 and based on the HSN notes, it is rightly classifiable under CTH 8467. The claim of the appellants in the respective bills of entry is that the declared product namely brush cutters is classifiable under CTH 8432 2990 since this product is meant for agricultural purposes and cleared to the farmers. Its use for agricultural purposes has been supported by certificates issued by the University of Agricultral Sciences, Bangalore. Thus, the impugned goods in question i.e. brush cutters is correctly classifiable under CTH 8467 8990 of CTA,1975. Therefore, the question of classification is settled and hence, the impugned goods are classifiable under 8467 as brush cutters. Whether the benefit of notification is available to brush cutters - Since we have already decided that the item imported is a brush cutter, therefore the question of extending the benefit of Notification does not arise. In view of the Supreme Court s decision in the case of Commissioner of Customs (Import), Mumbai vs. Dilip Kumar and Company 2018 (7) TMI 1826 - SUPREME COURT , the exemption Notification has to be interpreted strictly and therefore, question of extending the benefit to brush cutter does not arise. It is also on record that in appellant s own case, this Bench vide Final Order No.20934-20936/2018 held that the appellants are not eligible for exemption under Notification No.21/2002. As regards to demand against extended period of limitation, though it is admitted by the appellant that they were aware about the fact that power weeder is a machinery, they have obtained expert opinion from different sources to make proper preparation regarding the classification and as per expert opinion, it is exempted as per Notification No.12/2012. In the absence of any specific averments regarding wilful suppression of the fact. The impugned goods are classifiable as Brush Cutters under Chapter Heading 8467 and not eligible for the benefit of Notification. Invoking extended period of limitation cannot be sustained. The redemption fine of Rs.1,50,00,000/- was imposed on the Bills of Entry cleared earlier on the goods valued at Rs.8.48 crores and the redemption fine imposed of Rs.8,00,000/- was imposed on the present Bill of Entry cleared on the goods valued at Rs.40,58,791/-. The issue that goods when not available are not liable for confiscation is a settled law as held in the case of Commissioner of Customs (Import), Mumbai Versus Finesse Creation INC 2009 (8) TMI 115 - BOMBAY HIGH COURT . Therefore, the confiscation and redemption along with penalty for the extended period is set aside and for the present consignments valued at Rs. 40.58 lakhs, the redemption fine is reduced to Rs.4,00,000/- (Rupees Four Lakhs Only) u/s 111(m) of the Customs Act, 1962 and penalty to Rs.2,00,000/- (Rupees Two Lakhs Only) is confirmed u/s 114AA of the Customs Act, 1962 on the appellant-company and all other penalties are set aside. In the result, duty demand is confirmed for normal period with interest and the impugned order is modified in the above terms and the appeal No.20012 of 2015 is partially allowed and Appeal No. 20008 of 2015 pertaining to personal penalty on Shri S. A. Gopalakrishna, Director is set aside and this appeal is allowed.
The issues involved in the judgment are:
1. Whether the goods are 'power weeders or brush cutters'. 2. Whether the goods are classifiable under CTH 8432/8433 as claimed by the importer or under CTH 8467 as claimed by the Revenue. 3. Whether the benefit of concessional rate of duty 2.5% ad valorem in terms of Notification No.12/2012 dated 17.3.2012 is available. 4. Whether the appellant mis-declared the description of the goods to evade payment of duty. Issue 1: Whether the goods are 'power weeders or brush cutters' The Tribunal found that the imported items were indeed brush cutters and not power weeders. The user manual and product descriptions clearly identified the goods as brush cutters. The Commissioner had brought out the difference between power weeders and brush cutters, which was not disputed by the appellant. Power weeders are used for soil preparation, while brush cutters are for clearing thick grass and shrubs. Issue 2: Classification under CTH 8432/8433 or CTH 8467 The Tribunal held that the goods are classifiable under CTH 8467. The Bench referred to the case of Hikoki Power Tools India Pvt. Ltd. & Ors. Vs. CC, Bangalore, where it was decided that based on the HSN notes, brush cutters fall under CTH 8467. The Tribunal emphasized that hand tools fall outside the scope of CTH 8432/8433, which cover machinery. Issue 3: Benefit of concessional rate of duty The benefit of Notification No.12/2012 dated 17.3.2012 was found not applicable to brush cutters. The notification covers specific agricultural machinery, such as rotary tillers and weeders, but not brush cutters. The Tribunal cited the Supreme Court's decision in Commissioner of Customs (Import), Mumbai vs. Dilip Kumar and Company, stating that exemption notifications must be interpreted strictly. Issue 4: Mis-declaration to evade duty The Tribunal found that the appellant had mis-declared the goods as power weeders to claim concessional duty benefits. The extended period of limitation was not invokable due to the lack of specific averments regarding willful suppression of facts. However, the Tribunal confirmed the classification of the goods as brush cutters and denied the benefit of the notification for the normal period. Conclusion The Tribunal modified the impugned order to confirm the classification of the goods as brush cutters under CTH 8467 and denied the benefit of the notification. The demand for duty with interest for the normal period was confirmed, but the demand for the extended period was set aside. The redemption fine was reduced, and penalties under Section 114AA of the Customs Act, 1962 were confirmed for the present consignments. The appeal regarding personal penalty on the Director was allowed, setting aside the penalty.
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