2024 (9) TMI 942 - AT - Customs

Classification of imported goods - spectrometers - to be classified under Customs Tariff Heading (CTH) 90273010 or under Customs Tariff Heading (CTH) 90221900? - benefit of exemption N/N. 24/2005 dated 01.03.2005 - Time Limitation. Time Limitation - HELD THAT - There is no allegation of suppression of facts in the impugned orders. Appellant had made declaration as per the invoice/details provided by overseas supplier and there is no allegation of any fraud, collusion or willful misstatement or suppression of facts to invoke the extended period of limitation. Thus, the demand made against the goods imported against Bill of Entry No. 725969 dated 15.04.2008 by issuing a Show Cause Notice after 3(three) years and 8(eight) months is barred by limitation and impugned orders are unsustainable. Classification - HELD THAT - Further, the issue of classification of the impugned imported goods is not decided as the issue of limitation is considered, and it is found that the impugned order is unsustainable on limitation. Appeal allowed.

Summary

Issues:
Classification of spectrometers under Customs Tariff Heading, Allegation of improper declaration by the Appellant, Demand of differential duty, Limitation period for issuing Show Cause Notice, Penalty imposed under Section 114A of the Customs Act, 1962.

Classification of Spectrometers:
The issue in the appeal pertains to the classification of spectrometers imported by the Appellant. Initially, the Appellant declared the item under Customs Tariff Heading (CTH) 90273010 and availed exemption under Notification No. 24/2005. However, a Show Cause Notice was later issued alleging that the goods should be classified under CTH 90221900 due to the use of X-rays. The demand for differential duty was raised based on this re-classification. The Appellant argued that they made a proper declaration based on the manufacturer's catalogue and that the demand was time-barred as there was no evidence of suppression of facts at the time of import.

Limitation Period and Allegation of Improper Declaration:
The Appellant contended that the demand of duty was barred by limitation, as the Show Cause Notice was issued more than three years and eight months after the import. The Appellant relied on a judgment from the Hon'ble High Court of Bombay to support their argument that the extended period of limitation should not be invoked without evidence of fraud, collusion, or willful misstatement. They emphasized that the proper officer accepted the declaration at the time of assessment, and no investigation was conducted, undermining the allegation of suppression of facts.

Penalty Imposed under Section 114A:
The Adjudication Authority confirmed the duty demand and imposed a penalty under Section 114A of the Customs Act, 1962. However, the Appellant challenged this decision, arguing that there was no basis for invoking the extended period of limitation and that the penalty was unjustified due to the absence of any fraudulent intent or suppression of facts on their part.

Judicial Precedents and Legal Arguments:
The Appellant's legal representatives cited judgments from the Hon'ble Supreme Court and the Tribunal to support their arguments regarding the classification of goods and the nature of the declaration made at the time of import. They emphasized that the Appellant provided correct details and that any change in the department's view should not lead to allegations of misdeclaration or suppression of facts.

Decision and Conclusion:
After hearing both parties and examining the records, the Tribunal found that the demand for duty against the imported goods was barred by limitation. There was no evidence of suppression of facts, fraud, collusion, or willful misstatement to justify invoking the extended period of limitation. Therefore, the impugned orders were deemed unsustainable on the grounds of limitation. As a result, the appeal was allowed, and any consequential relief was granted in accordance with the law.

Conclusion of the Judgment:
The Tribunal allowed the appeal, emphasizing that the demand for duty was time-barred and unsustainable due to the absence of evidence supporting the allegation of improper declaration or suppression of facts. The decision highlighted the importance of proper assessment and the lack of fraudulent intent on the part of the Appellant in declaring the imported goods.