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TMI Blog2025 (2) TMI 639X X X X Extracts X X X X X X X X Extracts X X X X ..... e 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat 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 Custom ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ies of goods of CTH 8702 to 8704 and does not include two wheeled electric vehicles, namely motorcycle, moped and scooty and as per the Tariff Act, two wheeled electric vehicles and parts thereof are appropriately classifiable under CTH 8711 and CTH 8714, respectively. The audit officers also observed that HS Code of the items in question was mentioned as CTH 8711 60 in the Bill of Lading pertaining to Bill of Entry dated 31.10.2020, which had been uploaded on e-Sanchit, whereas the appellant had classified the said item under CTI 8708 99 00. It, therefore, appeared to the audit officers that the appellant had mis-classified the impugned items under CTI 8708 99 00 and the items appeared to be correctly classifiable under CTI 8700 60 20. Consequently, basic customs duty appeared to be payable @100% in addition to social welfare surcharge [SWS] @10% and Integrated Goods and Services Tax [IGST] @28%. Thus, the mis-classification of the impugned goods had resulted in short payment of duty amounting to Rs. 5,52,09,099/-. 3. A show cause notice dated 29.04.2021 was, thereafter, issued by the Deputy/Assistant Commissioner of Customs, New Delhi to the appellant requiring it to show cause ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uch incomplete or un-finished goods have the essential characteristics of finished goods. [First part of rule 2(a)]. The heading will also include finished goods removed un-assembled or disassembled i.e., in SKD or CKD packs. [second part of Rule 2(a)]" Submissions of the appellant 8. Learned counsel for the appellant has made the following submissions: (i) The appellant had imported various parts of e-Scooty and classified them under CTI 8708 9900 and paid BCD at the rate of 15%. There is no dispute regarding the SWS and IGST. The audit officers observed that Chapter Heading 8708 covers parts and accessories of goods falling under Chapter Heading 8702 to 8704 but does not include two wheeled electric vehicles viz motorcycle, moped, scooty etc., which are classifiable under chapter hearing 8711 and 8714. Accordingly, a show cause notice was issued proposing reclassification of the goods and recovery of differential duty. Even if the declared classification was deemed incorrect there is no short payment of duty. (ii) The first contention in the impugned order is that the spare parts of e-Scooty are correctly classifiable under CTH 8704 and second contention is that they ar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ming the classification under CTI 8711 6090. If the Principal Commissioner decided to reclassify the goods under this CTI, it is NOT open to him to deny the unconditional notification to which it was entitled. (vii) Even if the classification of the imported goods is changed, it cannot attract confiscation of the goods under section 111(m) of the Act. Consequently, there cannot be any penalty under section 112(a) (ii). (viii) The impugned order confirmed and the SCN proposed the demand invoking extended period of limitation but they have not established any element of collusion, mis-statement or suppression of fact. In fact, the goods were cleared after examination of goods by the officers. (ix) In view of the above, the appeal may be allowed and the impugned order may be set aside. Submissions of the Revenue 9. Learned authorized representative appearing for the Revenue made the following submissions: (i) The imported goods deserve to be classified under CTH 8711 as e-Scooty even if we all the parts of the e-Scooty were not imported so long as they have the essential components such as motor, frame assembly, controller, brake, front fork etc. (ii) It was found i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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? Assessment of several Bills of Entry together 12. The first question to be answered is whether two or more Bills of Entry Bills can be assessed together to determine the classification of the goods, and demand differential duty or otherwise. To answer this question, we must examine the legal provisions relating to the Bills of Entry and assessment. 13. Section 46 of the Customs Act requires the importer to 'make an entry' of the imported goods by filing a Bill of Entry and section 47 of the Customs Act empowers the proper officer to make an order permitting clearance of goods for home consumption. 'Making an entry' is a term used in Customs to submitting a form (known as Bill of Entry) to the Customs to clear the imported goods. The Bill of Entry is not only a declaration of the goods to be imported but is also the document through which import duty under section 17 of the Customs Act is self-assessed by the importer. Duty must ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is unable for want of full information to furnish all the particulars of the goods required under this sub-section, the proper officer may, pending the production of such information, permit him, previous to the entry thereof (a) to examine the goods in the presence of an officer of customs, or (b) to deposit the goods in a public warehouse appointed under section 57 without warehousing the same. (2) Save as otherwise permitted by the proper officer, a bill of entry shall include all the goods mentioned in the bill of lading or other receipt given by the carrier to the consignor. (3) The importer shall present the bill of entry under sub-section (1) before the end of the next day following the day (excluding holidays) on which the aircraft or vessel or vehicle carrying the goods arrives at a customs station at which such goods are to be cleared for home consumption or warehousing: Provided that a bill of entry may be presented at any time not exceeding thirty days prior to the expected arrival of the aircraft or vessel or vehicle by which the goods have been shipped for importation into India: Provided further that where the bill of entry is not presented within the ti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... duty has been paid, he can give an order clearing them for home consumption. 16. In assessing any tax, there is, among other things, a unit of assessment. For instance, income tax is assessed on the income earned during the financial year. If 'A' has substantial income which is taxable under the highest bracket of income tax during a financial year, he will be taxed accordingly. If next year, he has very little income, he will be taxed accordingly - at low rates or nil. The income in the second year cannot be treated as if it is the income in the first year and taxed at a higher rate. Conversely, the assessee cannot claim to treat income of the first year to be treated as income in the second year and lower his taxes. Any adjustments between financial years can be made only as provided in the law (for instance, carrying forward depreciation or losses). 17. Similarly, 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 sec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y 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). 25. We, therefore, find that 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. 26. For the aforesaid reasons, 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. Exemption notification 27. Another submission of the appellant is that even if the imported goods were classified as e-Scooty under CTH 8711, it was liable to pay BCD only at 15% ad valorem as per exemption Notification No. 50/2017-Cus. dated 30 June 2017 as amended by Notification No. 3/2019-Cus. dated 29 January 2019, and further by Notification No. 1/2020-Cus. dated 2 February 2020 (S. No. 531A). Since the appellant had anyway paid duty at 15% advalorem, there can be no demand of differential duty. 28. Reven ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erve from destruction of certain rights, remedies or privileges already existing." 32. Thus, section 12 of the Customs Act levies duties at such rates as may be specific into the Customs Tariff Act, 1975, except as otherwise provided in this Act or in any other law for the time being in force. Thus, this section deals with two types of situations as follows: (a) Where it is not otherwise provided in the Customs Act or any other law - duties should be charged as specified in the Customs Tariff Act, 1975 (b) Where it is otherwise provided in the Customs Act or any other law- the other provision prevails and subject to that provision, duties shall be charged as per the Customs Tariff Act, 1975. 33. The other provision relevant to the question before us is section 25 of the Customs Act, which empowers the Central Government to, in public interest, exempt duties wholly or partly and conditionally or unconditionally. It reads as follows: Section 25. Power to grant exemption from duty. - (1) If the Central Government is satisfied that it is necessary in the public interest so to do, it may, by notification in the Official Gazette, exempt generally either absolutely or subj ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... claim the notification to be eligible to its benefit. Thirdly and most importantly, the charge of duty under section 12 of the Customs Act will be only to the extent of tariff rate read with the exemption notification because once a notification is issued under section 25, such goods fall under the exception clause of section 12 and it is not for the adjudicating authority to charge duty beyond what is provided in section 12. 37. We now proceed to examine the notification itself. It reads as follows. Notification No. 50 /2017 -Customs dated 30th June, 2017 as amended by Notification No. 3/2019-Cus dated 29 January 2019 and Notification No. 1/2020-Cus dated 2 February 2020 [ S.No. 531A] G.S.R. (E).- In exercise of the powers conferred by sub-section (1) of section 25 of the Customs Act, 1962 (52 of 1962) and sub-section (12) of section 3, of Customs Tariff Act, 1975 (51 of 1975), and in supersession of the notification of the Government of India in the Ministry of Finance (Department of Revenue), No. 12/2012 -Customs, dated the 17" March, 2017 published in the Gazette of India, Extraordinary, Part H, Section 3, Sub-section (i), vide number G.S.R. 185 (E) dated the 17" ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. 39. 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 40. In the impugned order, the imported goods were held liable for confiscation under section 111(m) because the appellant had wrongly classified the imported goods. Although the classification has been determined in favour of the appellant, we proceed to examine this question of confiscation as well. 41. Section 111(m) of the Customs Act reads as follows: 111. Confiscation of improperly ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... her sum, consequent upon any notification issued therefor under this Act or under the Customs Tariff Act or under any other law for the time being in force; (d) the quantity, weight, volume, measurement or other specifics where such duty, tax, cess or any other sum is leviable on the basis of the quantity, weight, volume, measurement or other specifics of such goods; (e) the origin of such goods determined in accordance with the provisions of the Customs Tariff Act or the rules made thereunder, if the amount of duty, tax, cess or any other sum is affected by the origin of such goods; (f) any other specific factor which affects the duty, tax, cess or any other sum payable on such goods, and includes provisional assessment, self-assessment, re-assessment and any assessment in which the duty assessed is nil;" 45. Evidently, classification is a part of the assessment. If the importer wrongly assesses the duty (by incorrect classification, notification, etc.), the remedy against it is a re-assessment by the proper officer under section 17(4). The re-assessment can further be appealed against before the Commissioner (Appeals) or this Tribunal or the Supreme Court and at any s ..... X X X X Extracts X X X X X X X X Extracts X X X X
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