2024 (10) TMI 63 - AT - Customs

Levy of penalty on the appellant for wrong declaration of the classification of the goods - Classification of imported goods - Surgical Microscope for Neurosurgery Zeiss OPMI Pentero with accessories - to be classified under CTH 90189099 or under CTH 90118000? - benefit of concessional rate of duty under Sl.No.473 of No.12/2012-Cus dated 17.03.2012 as amended - HELD THAT - The appellant had disclosed the description of the goods in their Bill of Entry as Surgical Microscope for Neurosurgery Zeiss OPMI Pentero with accessories claiming the classification under CTH 90189099 along with benefit of Notification as per interpretation of the respective entry as understood by them. The Department, after accepting the classification accordingly assessed the goods and later, came to the conclusion that the classification declared by the appellant is not correct and the correct classification is CTH 90118000. Since this Tribunal has been consistently taking the view that where the description of the goods is correctly disclosed in the Bill of Entry and the relevant technical documents including brochures filed along with Bill of Entry, imposition of penalty under Section 114A in the said circumstances cannot be sustained. 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 , in similar circumstances, this Tribunal has observed ' The goods were physically examined by the assessing officer and thereafter allowed to be cleared on payment of applicable duty. Since the goods were meant to be used for agricultural purposes, they classified it according to their understanding under CTH 84322990. We find that the appellant declared the description of the goods correctly all along during the said period. Also, the goods were examined and assessed by the Department. Once the catalogue has been submitted by the appellant during the course of assessment, therefore, it is the responsibility of the Department to ascertain from the catalogue and description its classification under the appropriate heading. This Tribunal has consistently held that once the description of the goods is correctly disclosed, wrong classification of the said goods on the basis of description cannot be the basis for invoking extended period of limitation.' There are no justification for imposition of penalty - In the result, the impugned order is modified to the extent of setting aside the penalty imposed under Section 114A of the Customs Act, 1962 - Appeal is disposed of.

Summary

Issues:
1. Classification of imported goods under CTH 90189099 and benefit of concessional rate of duty under Notification No.12/2012-Cus.
2. Imposition of penalty under Section 114A of the Customs Act, 1962 for wrong declaration of classification.

Analysis:
Issue 1:
The appellant imported a "Surgical Microscope for Neurosurgery - Zeiss OPMI Pentero with accessories" and declared its classification under CTH 90189099, claiming the benefit of a concessional rate of duty under Notification No.12/2012-Cus. The Department later alleged that the correct classification should be under CTH 90118000, leading to a show-cause notice for recovery of customs duty. The appellant contended that they had correctly disclosed the goods' description in the Bill of Entry and invoices, supported by the catalogue. The Tribunal noted that the goods were assessed as per the appellant's declaration, and the penalty under Section 114A cannot be imposed solely based on a different interpretation of classification. Citing previous judgments, the Tribunal emphasized that correct disclosure of goods' description should preclude penalty imposition, as seen in the case of Hikoki Power Tools India Pvt. Ltd. Vs. CC [2024(3) TMI 137].

Issue 2:
The main issue in the appeal was whether a penalty was justifiable for the alleged wrong declaration of goods' classification and the benefit claimed under Notification No.12/2012-Cus. The Tribunal found that the appellant had accurately disclosed the goods' description in the Bill of Entry, and the Department had accepted the classification initially. The Tribunal held that penalty imposition was not warranted when the goods' description was correctly disclosed, even if the classification was disputed later. Relying on precedent, the Tribunal set aside the penalty imposed under Section 114A of the Customs Act, 1962. The decision was based on the principle that a penalty should not be levied solely on a difference in interpretation of classification when the goods' description was accurately presented.

In conclusion, the Tribunal ruled in favor of the appellant, setting aside the penalty imposed under Section 114A of the Customs Act, 1962. The judgment highlighted the importance of accurately disclosing goods' descriptions in the Bill of Entry to avoid penalties based on subsequent classification disputes. The decision aligned with previous rulings emphasizing that penalty imposition should be based on deliberate misdeclaration or suppression of facts, rather than differences in classification interpretation.