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TMI Blog2025 (1) TMI 747X X X X Extracts X X X X X X X X Extracts X X X X ..... blic of Korea (South Korea) and classified the same under CTH 76109090 and also claimed nil rate of basic customs duty vide S.No.610 of Customs Notification No. 152/2009 dt.31.12.2009. The said consignment was cleared by the Customs as per the claimed classification and notification benefit. However, subsequent to the clearance, DRI Officers had issued a SCN, based on certain intelligence that the appellants have misclassified their product under CTH 76109090 whereas the said product is rightly classifiable under CTH 84806000. Further, based on the statement recorded and submission of certain documents including, inter alia, purchase orders of the appellant placed on their supplier, the department felt that since the essential character of the imported goods are assembling moulds used for moulding concrete in the construction activity, the same would be more appropriately classifiable under CTH 84806000 and not under CTH 76109090, as claimed. Therefore, essentially they felt that the imported goods were basically assemblies identifiable as parts of article of Chapter 84 and since they are more akin to moulds, it would be appropriately classifiable under CTH 84806000 and that since ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f subject notice. h) That coffering panels intended for pouring concrete, having the character of mould (CTH 8480) are excluded from the provisions of CTH 7610. 4. Therefore, essentially the Adjudicating Authority has held that the imported AFM as having essential character of mould since function of a mould is to retain the material in pre-determined shape until it sets in the intended shape and not of an aluminium structure envisaged in CTH 7610. 5. Learned Advocate for the appellant submits that in view of the judgment in the case of Alcove Construction Pvt Ltd Vs CC, Kolkata [Final Order No.76894/2024 dt.12.09.2024], the classification of imported AFM is no longer res integra and it has been held by the Tribunal that the same would be righty classifiable under CTH 76109010. He further submits that even otherwise, careful analysis of the applicable CTH and the proposed CTH read with HSN explanatory notes and the actual nature of goods would indicate that they are more appropriately classifiable under CTH 76109010 and not under CTH 84806000. He further submits that the department has placed reliance on the definition of 'Formwork' as given in Wikipedia and no expert advice or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e. 8. Heard both sides and perused the records. 9. The core issue to be decided in this matter is whether imported AFM is classifiable under CTH 76109010 or CTH 84806000. From the documents and evidence on record, it appears that the appellants had placed order for AFM for the proposed APTIDCO project. Therefore, there is no denial that the items were specifically designed to suit the end use of the appellant i.e., construction of building and related structures. However, before we take up the statutory provisions of classification under competing headings, for the ease of reference, the said headings are reproduced below:- Tariff Item Description Unit Rate of duty Standard Preferential Areas 7610 Aluminium structures (excluding Prefabricated buildings of heading 9406) and parts of structures (for Example, Bridges and bridge-sections, towers, lattice masts, Roofs, roofing frameworks, doors and windows and their frames and thresholds for doors, balustrades, pillars and columns); aluminium plates, rods, profiles, tubes and the like, prepared for use in structures 7610 10 00 Doors, windows and their frames and thresholds for doors kg. 10% ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... plastics. In general, the essential function of a mould is to retain the material in a predetermined shape while it sets; some moulds, also exert a certain pressure on the material. But the heading excludes stamping dies of heading 82.07 since they shape the material solely by means of a powerful blow or compression (e.g., dies for stamping out sheet-metal goods). 11. The department is relying on the explanatory note which explains about mould for mineral materials. This has been described as "moulds for moulding concrete, cement or asbestos-cement goods (tubes, vats, paving stones, flags, chimney-pots, banisters, architectural ornaments, wall, floor or roof slabs, etc.) and also moulds for making prefabricated construction elements of reinforced or pre-stressed concrete (window frames, parts of vaulting beams, railway sleepers, etc.). 12. Learned Advocate for the appellant has shown us some photographs to better appreciate the use of Aluminium Formwork in the construction of building, structure, etc. These photographs are reproduced below for ease of reference. 13. We have seen the photographs submitted by the learned Advocate on 13.12.2024 and we find that though it has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... formwork is primarily used in construction to shape and support structures temporarily, the moulds are used in creating multiple copies of desired shape and design often used for casting smaller elements like decorative features or precast components. The reliance placed by the Adjudicating Authority that it is customized and cannot be used or moved to other location is also misplaced. It is nobody's case that these formworks remain even after concretes were set in and that they were not removed and kept elsewhere for a similar use at a later date, if required. 15. CTH 7610 covers, inter alia, aluminium structures and by way of example, it includes, inter alia, roofing frameworks. The roofing framework is therefore covered within CTH 7610 and therefore, it is necessary to understand what roofing framework is and how it is different from formwork. Roofing framework refers to structural element that supports a roof and, inter alia, provides structural support and also serves as a base for roofing material. In other words, it would be permanent structure as distinct from aluminium formwork. It is here that one has to see that the heading is vast enough to cover all kinds of aluminium ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to avoid interest burden, etc. However, in respect of remaining 5 Bills of Entry, which is the subject matter of this appeal, they are contesting that the same as they felt it is appropriately classifiable under CTH 7610 on the grounds that essential character of the goods is imparted by the aluminium and these items are useful for one time. Moreover, the suppliers have classified the item under CTH 7610 and that the custom officers have not denied the said classification, as claimed by them. Thereafter, the Adjudicating Authority, by relying on purchase contracts and statutory provisions under Chapter 76 and Chapter 84 as well as HSN explanatory notes, made an observation that since the goods are predesigned and custom made shuttering material, it cannot be used for any other purpose. Therefore, in view of the HSN explanatory note, which clearly excludes structures and part of structures, which do not stay in place after construction and specific exclusion (b) which excludes coffering panels intended for pouring concrete having the character of mould from the purview of Chapter 76, came to the conclusion that the product imported by the appellant is rightly classifiable under CTH ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... construction of house rather from the facts, it is apparent that these were used as shutters and support, in situ, where the concrete gets set and immovable structures like houses, building, etc., emerge. 19. On the other hand, CTH 7610 covers, inter alia, all kinds of aluminium structure except for the exclusion provided, i.e., mould falling under Chapter 84. Therefore, even if there is a mould made out of 100% aluminium also, it would be not classifiable under CTH 7610 and it will be falling under Chapter 84. However, when the product itself is not a mould then the exclusion will not be applicable. The same heading also includes aluminium plates, rods, profiles, tubes and the like, prepared for use in structures. In this case, as discussed in the foregoing paras, these goods are nothing but various aluminium plates though custom designed, which are assembled at site, in situ, for construction of buildings, etc. Since in view of the use of this panel it cannot be called a mould, therefore, reclassification proposed by the department is not sustainable and classification claimed by the appellant will have to be accepted. 20. The Revenue has also relied on the judgment of CC (Imp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n him, that one has to look merely at the words clearly stated and that there is no room for any intendment nor presumption as to tax. It is only the letter of the law and not the spirit of the law to guide the interpreter to decide the liability to tax ignoring any amount of hardship and eschewing equity in taxation. Thus, we may emphatically reiterate that if in the event of ambiguity in a taxation liability statute, the benefit should go to the subject/assessee. But, in a situation where the tax exemption has to be interpreted, the benefit of doubt should go in favour of the revenue, the aforesaid conclusions are expounded only as a prelude to better understand jurisprudential basis for our conclusion. We may now consider the decisions which support our view." 21. Therefore, if there is any ambiguity in a taxation provision, it is to be interpreted in favour of the subject/ assessee. However, when a tax exemption has to be interpreted, the benefit of doubt should go in favour of the Revenue. Thus, as the issue is not that of exemption and more of classification leading to demand of duty, this judgment would not help the cause of the department. In fact, going by the ratio, we ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e also find that the reliance has been placed by the learned Advocate on the recent judgment of the coordinate bench at Kolkata, where the similar item has been held to be classifiable under CTH 76109010 and therefore, the ratio of the said judgment is applicable to the present factual matrix as the facts are more or less identical. Further, we also note that in this case, the Bill of Entry, which was cleared under self assessment, has not been challenged by the Revenue. Therefore, in view of the judgment in the case Shri Rajib Saha Vs CC (Prev), Shillong (supra), the demand is not sustainable on this count also. It is also noted that there is some force in the submissions made by the appellants that the Adjudicating Authority has gone beyond the scope of SCN by denying them the benefit of notification 152/2009 (S.No.610), in as much as there was no reasons cited in the SCN as to why the above said notification should be denied. We have perused the notification 152/2009 and we find that this is a notification provided for concessional duty in respect of imports made from Republic of Korea. In the SCN or in the OIO, there is no specific discussion as to why this notification has bee ..... X X X X Extracts X X X X X X X X Extracts X X X X
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