2024 (9) TMI 1040 - AT - Customs

Classification of imported goods - Brush Cutters - to be misdeclared as Power Operated Reapers - suppression of facts or not - time limitation - HELD THAT - The classification of Brush Cutters stands settled in the case of M/S. RATNAGIRI IMPEX PVT. LTD. AND S.A. GOPALAKRISHNA DIRECTOR VERSUS THE COMMISSIONER OF CUSTOMS, BANGALORE 2024 (3) TMI 194 - CESTAT BANGLORE and in the case of HIKOKI POWER TOOLS INDIA PVT LTD AND SHRI DATTATREYA JOSHI VICE PRESIDENT COMPANY SECRETARY VERSUS COMMISSIONER OF CUSTOMS, BANGALORE 2024 (3) TMI 137 - CESTAT BANGALORE wherein this Tribunal had clearly held that the Brush Cutters are classifiable under Chapter Heading 8467 8990. Following the ratio rendered in the above decisions, in the present appeal also, the classification of the Brush Cutters is upheld under Chapter Heading 8467 8990. Suppression of facts or not - HELD THAT - The appellant knowing well that the goods are nothing but Brush Cutters , mis-declared them as Power Operated Reapers for claiming the benefit of duty under agricultural equipment. From the instruction manual placed on record, it is found that the product is clearly mentioned as Brush Cutter though the catalogue mentions it as Power Operated Reaper . This statement has not been retracted and therefore, the investigation clearly established that there was mis-declaration on the part of the appellant since the user manual clearly mentions the product as Brush Cutter and Shri Sreepada, Partner admits to having got the documents from the supplier to mention as Power Operated Reapers only for the purpose of availing subsidy on agricultural equipment. In view of the above, the impugned order is upheld to the extent of demand of differential duty of Rs.53,37,203/- in terms of Section 28(4) of the Customs Act 19962 along with applicable interest under Section 28AA and equivalent penalty u/s 114A of the Customs Act, 1962, on the appellant-company, as per law. The confiscation of goods valued at Rs.31,25,693/- is upheld, however, redemption fine is reduced to Rs.3,00,000/-. The penalty imposed on Shri Sreepada, Partner of the appellant-company is reduced to Rs. 50,000/- u/s 112 of the Customs Act, 1962. The penalties imposed u/s 114AA of the Customs Act, 1962 are set aside. Appeal disposed off.

Summary

Issues: Classification of imported goods, Mis-declaration, Suppression of facts, Duty evasion, Confiscation, Penalties.

Classification of Imported Goods: The appellant imported goods mis-declared as 'Power Operated Reapers' instead of 'Brush Cutters,' evading duty payment. The Commissioner reclassified the products under Chapter Heading 8467 8990 due to clear suppression by the appellant. The Tribunal upheld the classification under Chapter Heading 8467 8990 based on previous decisions and rejected the appellant's argument against the extended duty demand.

Mis-Declaration and Suppression of Facts: The appellant knowingly mis-declared the goods as 'Power Operated Reapers' to evade duty liability, despite clear indications that the products were 'Brush Cutters.' Evidence from catalogues, user manuals, and the supplier's website confirmed the mis-declaration. The appellant's partner's statement further supported the intentional mis-declaration for subsidy purposes, leading to the upheld demand for differential duty, confiscation of goods, and penalties.

Duty Evasion and Confiscation: The appellant's mis-declaration resulted in duty evasion, leading to a demand for differential duty payment of Rs. 53,37,203. The goods were confiscated, but redemption fine was reduced to Rs. 3,00,000. The Tribunal upheld the duty demand, confiscation, and reduced redemption fine based on the established mis-declaration and suppression of facts.

Penalties: Various penalties were imposed under Sections 114A, 112, and 114AA of the Customs Act, 1962. The penalties imposed on the appellant's partner were reduced, while penalties under Section 114AA were set aside. The Tribunal modified the impugned order, reducing the penalties on the appellant's partner and setting aside certain penalties imposed under the Customs Act, 1962.

Conclusion: The Tribunal upheld the reclassification of goods, duty demand, confiscation, and certain penalties based on the established mis-declaration and suppression of facts by the appellant. The impugned order was modified, reducing penalties and adjusting the redemption fine, ultimately disposing of the appeals on 17.09.2024.