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TMI Blog2009 (5) TMI 446X X X X Extracts X X X X X X X X Extracts X X X X ..... claiming exemption as provided; under Notification No. 5/2004-Cus., dated 8-1-2004 (Sl. No. 355) as amended through the Air Cargo Complex, Hyderabad. The Officers, on the basis of intelligence, seized the goods and detailed investigation was carried out. On the request of the importer and also on the basis of their clarification that the goods are not Populated Printed Circuit Boards, they were ordered for provisional release on execution of Bond for full value of the goods and on payment of 5% BCD under Notification No. 21/2002-Cus. (Sl. No. 321) dated 1-3-2002, as amended, and other applicable duties by classifying them as Parts of Telematic Reception Apparatus falling under CTH 85299090 pending further investigation. Subsequent to the provisional release, they filed 9 Bills of Entry classifying the goods as Electronic/Hybrid Micro Assembly Q 2403 A (Parts of Electronic Calculating Machine) claiming benefit of Notification No. 21/2002-Cus., dated 1-3-2002 [Sl. No 321 (ii)]. During investigation, it was revealed that the same items were imported on 6-2-2004 also claiming benefit of exemption under Notification 05/2004-Cus. (Sl. No. 355 and Notification No. 06/2004-Cus. for SAD). T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Customs Act. Redemption Fine of Rs.4,66,535/- was imposed under section 125. Interest under Section 28AB has been demanded. A penalty of Rs.2,46,45,280/- has been imposed under Section 114A of the Customs Act. 5. The appellants are highly aggrieved over the impugned order. The following submissions were made: (i) The appellants are manufacturing PCO Call Monitors using WISMO Modules and the PCO Call Monitors have been assessed to Central Excise Duty by classifying them under Heading 84702000 of the Central Excise Tariff, which is not in dispute. Therefore, the WISMO Modules imported by the appellants are admittedly used as 'Parts' in the manufacture of the same and are duly classifiable under Heading 8473 of the Customs Tariff. (ii) During the year 2002 to 2004, the appellants classified the item under 8473. In their first import of the impugned goods, they classified the items under 8529 as 'Parts of Cellular phones'. But the Customs authorities revised the classification from 8529 to 8473 as Parts of PCO Call Monitor and assessed to duty accordingly. Bill of Entry filed by the Appellant at page no. 56 of the paper book was cited. Therefore, the Commissioner ought to have appre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... XVI of the Customs Tariff Act, 1975. As per Note 2(b) of Section XVI, a part, which is equally suitable for use principally with goods of headings 85.17 and 85.25 to 85.28 are to be classified under heading 85.17. Now, it has to be proved beyond doubt that WISMO has an equally suitable application, principally with the goods headings 8517 and 8525 to 8528. But the basic fact is that CTH 8517 deals with those apparatus, which work only on line telephony or line telegraphy. The allegation in the Show Cause Notice is on account of the basic misunderstanding by the department between two entirely different technologies classifiable under CTH 8517 and 8525. The Commissioner, in the impugned order, has religiously towed the above said mis-understanding without distinguishing between the line telephony and wireless telephony and thus concluded that WISMO are classifiable under 8571.90. In view of the same, it was submitted that the OIO has been passed contrary to the facts and without proper application of mind and needs to be set aside. (vi) The opinion of Shri V. Madhusudanan of ECIL was strongly contested on the ground that WISMO has no application, whatsoever, in line telephony/teleg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nes Ltd. v. CCE - 2003 (152) E.L.T. 39 (S.C.) (e) Densons Pultreknik v. CCE - 2003 (155) E.L.T. 211 (S.C.) (f) S. Narender Kumar v. CCE - 2003 (154) E.L.T. 242 (T) (g) Virlon Textile Mills v. CCE - 2003 (158) E.L.T. 469 (T) (h) Cosmic Dye Chemicals v. CCE - 1995 (75) E.L.T. 721 (S.C.) (xi) In spite of adjusting an amount of Rs.1,92,65,325/- and ignoring the fact that the differential duty is only 53,79,955/-, a penalty of Rs. 2.46,45,280/- has been imposed. (xii) Reliance was also placed on the decision of the Tribunal in the case of CCE v. Machino Montell (I) Ltd. - 2004 (168) E.L.T. 466 (Tri.-LB) wherein, it has been held that there shall be no penalty or interest, whatsoever, if the duty has been paid before the Show Cause Notice. Therefore, it was urged that for the above reason stated, penalty cannot be levied to the extent of duty already paid by them. It was also submitted that the appellant is entitled for the concessional rate of 5% BCD for the importation of the impugned products under CTH 85299090. In that case, there is no mis-declaration warranting confiscation of the goods. 6. The learned SDR reiterated the impugned order. 7. We have gone through the reco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cations in line telephony. Even in the cross examination Shri D. Madhusudanan, Director of ECIL, has stated that the product is a GSM trans-receiver with transmission and receiving capability. In these circumstances, we are of the view that the classification of the impugned product would be under CTH 85299090. 7.2 The Commissioner has invoked the longer period and tried to justify the same. The Department itself was not sure of the classification of this product. Initially, the goods were classified under 8473 on the advice of the Department. It was stated that first the importers classified the item under 8529 and on insistence of the department, it was changed to 8473 and later; the department has taken a stand to classify the item under 8517. In order to justify the classification under 8517, the Department has relied on Note 2(b) of Section XVI of the Customs Tariff Act. The appellant has shown that the impugned item has no application in line telephony. Only parts which are suitable equally for both line telephony (8517) and wireless/radio telephony (8525) are classifiable under 8517 under Note 2(b) of Section XVI. When the product has no application in line telephony, this ..... X X X X Extracts X X X X X X X X Extracts X X X X
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