2024 (7) TMI 1469 - AT - Customs

Classification of imported goods - to be classified under Customs Tariff Item CTI 6102 30 10, CTI 6202 9390 and CTI 6210 5000 of the First Schedule to the Customs Tariff Act, 1975? - wilful suppression of facts or not - HELD THAT - It is clearly a case of interpretation of the Tariff entries and willful suppression of facts cannot be attributed in such a situation for section 28 (4) of the Customs Act to be applicable. The appellant had declared the details of the imported goods which were also physically examined. It is also stated that earlier the Customs Authorities had also examined the previous classification of subject goods on several occasions and permitted clearance under the classification adopted by the appellant. The appellant has placed on record the order dated 24.02.2023 passed by the Commissioner in respect of a show cause notice dated 01.10.2022 issued to the appellant for the past consignment of goods imported from September 2015 in which invoking the provisions of section 28 (4) of the Customs Act were also invoked. The Commissioner, however, not only held that the provisions of section 28 (4) could not have been invoked, but also held that sections 111 and 114A could also has not been invoked - The Commissioner has noted in the order that there was nothing to suggest presence of willful suppression of facts so as to enable the department to take recourse to the provisions of section 28 (4) of the Customs Act as it was a case of mis-classification only. The Commissioner also noted that once informed, the correct classification was accepted and the differential duty was paid. In view of the findings recorded by the Commissioner in the order dated 24.02.2023, which findings would be applicable in the present case, the impugned order dated 21.06.2021 passed by the Commissioner (Appeals) cannot be sustained and is set aside - Appeal allowed.

Summary

Issues:
Classification of imported goods under Customs Tariff Items, invocation of section 28(4) of the Customs Act, 1962, willful suppression of facts, mis-classification, appeal against Commissioner (Appeals) order.

Classification of Imported Goods:
The appellant, engaged in apparel business, imported goods classified as Knitted Jackets under HSN Code 6104 33 00, Woven Jackets and PU Jackets under HSN Code 6204 33 00. Customs Officers reclassified the goods as Knitted Jackets under HSN (T) 6102 3010, Woven Jackets under HSN (T) 6202 9390, and PU Jackets under HSN Code (T) 6210 5000 due to full opening front with a zipper fastener. Appellant paid differential duty and requested clearance, followed by a waiver of show cause notice.

Invocation of Section 28(4) of the Customs Act:
The Additional Commissioner invoked section 28(4) of the Customs Act, 1962, confirming differential duty demand of Rs. 12,71,462/- with penalty and confiscation under section 111(m). Appellant appealed to Commissioner (Appeals), who upheld the order on 21.06.2021. Appellant contended that the provision could not be invoked due to a genuine mistake promptly rectified upon department's suggestion, citing a similar precedent.

Willful Suppression of Facts and Mis-Classification:
Appellant argued that the term "jacket" lacked a specific definition in Tariff Act chapters but was classified based on Explanatory Notes defining jackets and blazers. They highlighted the absence of willful suppression, as goods were physically examined, and previous clearances were under the same classification. Commissioner's previous order in a similar matter emphasized the absence of willful suppression, leading to the acceptance of reclassification and payment of differential duty.

Appeal Against Commissioner (Appeals) Order:
Appellant challenged the Commissioner (Appeals) order dated 21.06.2021, citing a previous order where the Commissioner held that section 28(4) could not be invoked due to mis-classification without willful suppression. The Tribunal set aside the Commissioner (Appeals) order based on the findings in the previous order, allowing the appeal.

This comprehensive analysis covers the classification of imported goods, the invocation of section 28(4) of the Customs Act, willful suppression of facts, mis-classification issues, and the subsequent appeal against the Commissioner (Appeals) order, providing a detailed insight into the legal judgment.