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2025 (2) TMI 639 - AT - CustomsClassification of imported goods - assessment of more than one Bill of Entry together to determine the classification of the goods - e-scooter in disassembled and unassembled state - denial of benefit of the unconditional exemption Notification No. 50/2017-Cus as amended - confiscation - penalties. Assessment of several Bills of Entry together - HELD THAT - The Customs Act does not empower any officer to compel anyone to file a Bill of Entryor to file it in any manner or forbid anyone from filing a Bill of Entry. If the importer wants to clear the imported goods through customs he has to file a Bill of Entry. Once a Bill of Entry is filed the proper officer can clear them for home consumption as per section 47 if he is satisfied that the imported goods are not prohibited goods and that if duty has been paid - in Customs each Bill of Entry has to be assessed. If an importer for instance paid excess duty in one Bill of Entry and short paid duty in another Revenue can raise a demand under section 28 in the Bill of Entry where the duty was short paid and the importer can claim refund of the duty paid in excess under section 27 and it will have to be processed accordingly. Two or more Bills of Entry cannot be taken together and assessed. The only exception made in the law are the project imports under the Project Import Regulations 1986. If the importer claims and is allowed imports under these regulations all goods imported under various Bills of Entry under the project are assessed together under a single tariff heading 98.01. All assessments are kept provisional and at the end all assessments are finalised together. If several goods are sought to be cleared in a Bill of Entry which together would constitute an incomplete or unfinished or disassembled or unassembled article the goods so imported in the Bill of Entry should be classified as per the GRI 2(a) as complete or finished article - However if several Bills of Entry are filed for various goods each Bill of Entry must be assessed individually. The goods imported under different Bills of Entry cannot be considered together to decide the classification. In the SCN in this case all 26 Bills of Entry have been considered together to classify all the goods imported under them to be classified as e-Scooty under CTH 8711. Classification of the imported goods - HELD THAT - In the impugned order the classification of the imported goods was changed from parts of e-Scooty to e-Scooty itself by applying GRI 2(a). However it is not indicated as to how in each of the Bills of Entry the goods imported itself would be sufficient to consider them as e-Scooty applying GRI 2(a) - the Commissioner erred in classifying the parts of e-Scooty imported by the appellant as e-scooter as there is no evidence to established that in each of the Bills of Entry equal sets of parts were imported and that those sets of parts constitute the complete e-Scooty - the classification of the goods imported under the 26 Bills of Entry as e-Scooty in the impugned order cannot be sustained and needs to be set aside. Denial of benefit of the unconditional exemption Notification No. 50/2017-Cus as amended - whether the benefit of an unconditional exemption notification can be denied on the ground that it was not claimed in the bill of entry and if duty can be levied and collected ignoring the benefit of the notification? - HELD THAT - Some exemption notifications issued by the Central Government in public interest under section 25 of the Customs Act are conditional in which case it is up to the importer to either fulfil the conditions and avail the benefit of the notification or not. If the importer claims the benefit of notification it is for him to show that he fulfilled the conditions. Other exemption notifications are unconditional. All notifications-either conditional or unconditional- are issued if the Central Government is satisfied that it is in public interest to issue them. Notification (S. No. 531A) does not come with any conditions nor does it require the importer to claim it in the Bill of Entry for it to be entitled to its benefit. Tax laws and notifications must be strictly construed and there is no scope for intendment or reading any words into them. Since neither section 25 of the Customs Act nor the notification requires an importer to claim the benefit as a pre-condition the benefit of the notification has been wrongly denied by the Principal Commissioner in the impugned order on the ground that it was not claimed. The reason the appellant had not claimed the notification in its Bill of Entry is self-evident. It classified the goods under a different tariff heading and in the impugned order the classification has been changed and this notification applies to the changed classification. Confiscation and penalty - HELD THAT - There is no obligation under the law for the importer self-assessing the goods to anticipate if the proper officer or audit would find the classification appropriate or not and if so what classification they will find to be appropriate and file the Bill of Entry. The goods will not became liable for confiscation under section 111(m) of the Customs Act merely because the importer classified the goods as it thought proper and the officers subsequently take a different view - goods cannot be held liable for confiscation for claiming a wrong classification. Consequently the penalty under section 112 of the Customs Act which is dependent on the goods being held liable for confiscation under section 111 of the Customs Act also cannot be sustained. Conclusion - i) Each Bill of Entry must be assessed by itself and there is no provision in the Customs Act to combine the goods imported under more than one Bill of Entry to decide the classification and assess duty. ii) Sufficient evidence has not been provided in the SCN or the impugned order in respect of each of the 26 Bills of Entry to establish that the goods imported under them are sufficient to be classify them as e-Scooty in CKD form applying GRI 2(a). iii) The Principal Commissioner erred in denying the benefit of the exemption notification on the ground that the appellant had not claimed it in the Bill of Entry. Neither section 25 of the Customs Act nor the notification requires the importer to claim the exemption in the Bill of Entry as a pre-condition to enjoy its benefit. iv) Imported goods do not become liable to confiscation under section 111(m) of the Customs Act simply because the appellant had classified the imported goods under a CTI which is a matter of his opinion and there is no obligation on the appellant to either anticipate the views of the officers or to file Bills of Entry conforming to such views. The penalty under section 112 on the appellant cannot also be sustained. The impugned order set aside - appeal allowed.
1. ISSUES PRESENTED and CONSIDERED
(a) Can more than one Bill of Entry be assessed together to determine the classification of the goods? (b) Can the goods imported under the 26 Bills of Entry be considered as e-scooter in disassembled and unassembled state in the facts of this case? (c) Did the Commissioner correctly deny the benefit of the unconditional exemption Notification No. 50/2017-Cus as amended available to goods falling under CTH 8711 on the ground that the appellant had not claimed it in the Bills of Entry? (d) Was the Commissioner correct in holding the goods were liable for confiscation under section 111(m) of the Customs Act for alleged wrong classification and the consequently imposing penalty under section 112(a)(ii) of the Customs Act? 2. ISSUE-WISE DETAILED ANALYSIS Assessment of several Bills of Entry together The legal framework involves Section 46 and Section 47 of the Customs Act, which require the importer to file a Bill of Entry for the clearance of goods and allow the proper officer to permit clearance for home consumption. The Court noted that each Bill of Entry must be assessed individually, as there is no provision in the Customs Act to combine multiple Bills of Entry for assessment purposes, except under the Project Import Regulations. The classification and assessment of goods must be done individually for each Bill of Entry. Classification of the imported goods The Court found that the Principal Commissioner erred in classifying the imported parts as complete e-Scooty under CTH 8711 by applying GRI 2(a). There was insufficient evidence to establish that the goods imported under each Bill of Entry constituted a complete e-Scooty. The SCN failed to justify how the imported goods warranted classification as e-Scooty under GRI 2(a) for each Bill of Entry. Exemption notification The appellant argued that even if the goods were classified as e-Scooty, they were entitled to a reduced BCD rate of 15% under Notification No. 50/2017-Cus. The Court agreed, stating that the benefit of an unconditional exemption notification cannot be denied simply because it was not claimed in the Bill of Entry. Section 25 of the Customs Act does not require the importer to claim the benefit of an exemption notification to be entitled to it. The notification reduces the charge under Section 12, and duty cannot be collected beyond what is provided in the notification. Confiscation and penalty The Court examined Section 111(m) of the Customs Act, which provides for confiscation of goods that do not correspond with the entry made under the Act. The Court found that the classification of goods is a matter of opinion and part of self-assessment under Section 17(1). A wrong classification does not mean mis-declaration, and goods cannot be held liable for confiscation under Section 111(m) merely due to a different classification opinion. Consequently, the penalty under Section 112, dependent on confiscation under Section 111, cannot be sustained. 3. SIGNIFICANT HOLDINGS The Court held that each Bill of Entry must be assessed individually, and there is no provision to combine multiple Bills of Entry for classification and assessment. The classification of goods as e-Scooty under CTH 8711 was not justified due to insufficient evidence. The benefit of an unconditional exemption notification cannot be denied for not being claimed in the Bill of Entry, as it falls under the exception clause of Section 12. Imported goods are not liable for confiscation under Section 111(m) for wrong classification, and consequently, the penalty under Section 112 cannot be sustained. The appeal was allowed, and the impugned order was set aside.
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