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TMI Blog2024 (7) TMI 1123X X X X Extracts X X X X X X X X Extracts X X X X ..... need not be as elaborate as those in judgments of courts of law. By taking note of these principles, whether the order impugned herein contains reasons and whether the contentions raised by the petitioner were dealt with therein should be examined. Classification of goods - to be classified under CTH 8301 of the Customs Tariff Act or not - HELD THAT:- The reasons were specified in support of the conclusion, but vital contentions regarding GRI and the Explanatory Notes were not considered. In order to balance revenue interest, the impugned order dated 04.04.2024 is set aside on condition that the petitioner remits a sum of Rs. 1.75 crore as agreed to within four weeks from the date of receipt of a copy of this order. The sum of Rs. 1,75,00,000 exceeds 5% of the disputed tax demand under this head. The other heads of tax demand are not being reckoned in this regard because unreasoned conclusions were recorded - Subject to being satisfied that the said amount was received, the assessing officer is directed to provide a reasonable opportunity to the petitioner, including a personal hearing, and thereafter issue a fresh order within three months from the date of receipt of the petition ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s its essential character. Although the reply contained express reference to the above GRI, learned counsel submits that the same were not taken into consideration while drawing conclusions. According to learned counsel, if these GRI had been taken into consideration, the assessing officer would not have concluded that these goods fall under CTH 8708. His next contention was that the goods were classified as CTH 8708 merely on the ground that the goods are intended for use in motor vehicles. By classifying the goods under CTH 8708, learned counsel submits that the goods were subjected to tax at 28% instead of 18%. He also submits that the Explanatory Notes to the Harmonized System of Nomenclature (HSN) were referred to without any discussion thereon, and that the HSN also indicates that the smart key and lock system should be classified in chapter 83. 4. As regards the other defects dealt with in the impugned order, learned counsel referred to the observations of the proper officer and pointed out that no reasons were recorded. By way of illustration, as regards defect no.4 relating to ineligible claim of Input Tax Credit (the ITC ), he contended that the petitioner's reply was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for insisting on reasons is to disclose as to how the adjudicating authority applied his mind to the materials placed on record. According to learned Additional Government Pleader, the order impugned herein certainly contains reasons for rejecting the petitioner's classification and for placing the goods under CTH 8708. Merely because every contention raised in the petitioner's reply was not dealt with therein, he submits that it cannot be said that principles of natural justice were infringed. He further submits that an efficacious statutory remedy is available to the petitioner and that the petitioner should not be permitted to circumvent such statutory remedy in order to avoid the pre-deposit. Learned Additional Government Pleader also points out that the petitioner had filed statutory appeals in respect of two assessment periods and that one of those appeals pertains to a classification dispute. He also pointed out that this fact was not disclosed in the affidavit filed in support of the writ petition. 8. In response to these contentions, learned counsel for the petitioner submitted that there can be no quarrel with the propositions laid down in the cited judgments of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssly referred to Rule 3(a) and 3(b) thereof to contend that where the goods are classifiable under two headings of the Customs Tariff Act, the heading which provides the most specific description should be preferred to the heading providing the more general description. Rule 3(b) provides that the classification should be based on the material or component which gives the goods its essential character. Upon considering the goods in question, the assessing officer entered the following findings with regard to the nature of the goods:- In order to classify impugned goods under this chapter they must satisfy the chapter notes miscellaneous articles of base metal Here both the car lock set and Cart smart key made of combination of both metal and plastics therefore, impugned goods do not merit classification under this chapter 83. 11. The above extract indicates that the assessing officer recorded a finding that the car lock and smart keys set is made of both metal and plastic. In other words, the factual finding was that the relevant goods were made of two materials. Out of the two materials, one material is dealt with in Chapter 83, whereas, the other is not. In that factual context, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Company claimed ineligible input tax credit covered under Section 17(5) of the CGST Act, 2017. In this regard, we have already submitted a detailed reply vide letter dated 24th January, 2024. Your good office has considered ineligible credit without any basis nor provided any supporting annexures to state why such credit is ineligible. The Company would like to submit the ITC register for the FY 2020-21 along with GSTR- 2A for verification. Hence, we request for good office to drop the proceedings for the input tax credit alleged as ineligible. OBSERVATION OF THE PROPER OFFICER: The reply of the taxpayer has been carefully analysed and on verification of GSTR-2A along with ITC register it was observed that the taxpayer has availed ineligible input tax credit to the extent of Rs. 775810. Thereby the theto propose the reversal of ineligible input tax credit availed by the taxpayer. Defect No.15: Canteen Expenses Reply by the Taxpayer The taxpayer vide their replies have stated that the expenses are for factory and that they have not done recovery of such expenses from their employees Observation of the Proper Officer The reply of the taxpayer is verified based on which it is conclu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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