M/S. Saint GobaIn Glass India Ltd. Vs. Cc (Air), Chennai - Court Judgment

SooperKanoon Citationsooperkanoon.com/943208
CourtCustoms Excise and Service Tax Appellate Tribunal CESTAT Chennai
Decided OnFeb-11-2011
Case Number C/241/2009 (Arising out of Order in Original No. 630/2009 dated 12.05.2009 passed by the Commis
Judge THE HONOURABLE DR. CHITTARANJAN SATAPATHY, TECHNICAL MEMBER
AppellantM/S. Saint GobaIn Glass India Ltd.
RespondentCc (Air), Chennai
Advocates:For the Appellants: S. Murugappan, Advocate. For the Respondents: Ms. Indira Sisupal, JDR.
Excerpt:
1. heard both sides. 2. in this appeal, the appellants are not contesting the classification and the rate of duty determined by the customs authorities. shri s. murugappan, ld. advocate, appearing for the appellants states that the challenge is limited to confiscation of goods, imposition of redemption fine and penalty imposed on the appellants. he states that the impugned goods imported by the appellants were described as follows along with the customs tariff heading numbers in the bill of entry filed by them:- cth no. description of the items 26169090 planar target-silver-ag 3099*28*12.7 mono block version -3n7-1 no. 26080000 rotative target-zinc-anal type mag or qct dim 3191*9/13 mm 3n direct cast - 4 nos. 25059000 rotative target - silica siai type vac-mag or qct dim 3191 *9/13 mm sprayed - 6 nos. 3. both sides agree that on examination, the description indicated by the appellants have not been changed by the assessing officer but only the goods were found to be classifiable under different chapters viz., 71, 73 and 79 respectively. the appellants have agreed to forgo the exemption initially claimed by them and have paid the applicable duty accepting the classification determined by the customs authorities. the adjudicating commissioner has confiscated the impugned goods, imposed a redemption fine and has imposed a penalty on the grounds of misdeclaration of the tariff heading and claim for inapplicable exemption. it is the case of the appellants that they have imported the impugned goods for the first time, they were not aware of the correct classification and further that it was for the customs authorities to determine the correct classification. the ld. advocate appearing for the appellants states that indicating a wrong classification does not amount to misdeclaration and he seeks support for his argument from the following precedent decisions of the tribunal:- 1. jay kay exports and industries vs. cc, kolkata 2004 (163) elt 359 (tri.- kolkata) 2. hindustan national glass and ind. ltd. vs. cc, kolkata 2002 (145) elt 162 (tri.- kolkata) 3. alstom transport ltd. vs. cc, chennai 2007 (220) elt 312 (tri.- chen.) 4. raj television network vs. cc, chennai 2007 (215) elt 71 (tri.- chen.) he states that as per these decisions, finalization of the tariff heading under which the goods should fall is the ultimate job of the customs authorities and if the appellants have claimed wrong classification according to their limited understanding of the customs law, mens rea cannot be attributed to them nor confiscation and imposition of penalty can be resorted to. 4. heard the ld. dr, ms. indira sisupal, who supports the impugned order. she states that the cited decisions are not applicable to this case as the appellants sought clearance of the impugned goods under the risk management scheme and it was obligatory on their part to declare the correct classification and pay the correct rate of duty. she states that since a wrong classification was indicated and duty exemption was claimed by indicating such wrong classification, the appellants cannot escape the redemption fine and penalty which have been rightly imposed in respect of the impugned goods. she states that under the computerized edi system, unless a particular consignment is picked up at random for detailed scrutiny, goods get assessed as per the declaration and hence it is necessary on the part of the appellants to declare the correct classification. 5. after hearing both sides, i find that the description given by the appellants under the impugned bill of entry has not been questioned or changed by the customs authorities after examination and finalization of assessment. only the declared classification has been changed and the claimed exemption has been denied. the appellants have explained that the wrong classification has been indicated due to ignorance on the part of the appellants apart from stating that this is the first time that such consignments have been imported by them. i also do not find any evidence adduced by the department to controvert the claim of the appellants in regard. it is not a case where the department has found import documents including invoices which indicate a different classification at the port of export but the appellants have deliberately indicated a different entry to evade customs duty and claim lower assessment. had the department gathered any such evidence, the matter could have been viewed differently. but, no such case has been made out by the customs authorities. 6. the apprehension of the ld. dr that under the new system of assessment based on computerization and risk management system, if the assessees do not indicate the correct classification and rate of duty, there is likelihood of revenue loss is well founded. but, i find that no change in the law has been made to take into account such apprehension, and hence, however well founded the same may be, in the absence of any legal change, i am unable to accept either the ld. drs argument or the finding of the adjudicating commissioner that the ratio of the case laws cited by the appellants will not be applicable to the facts of this case. it has been the consistent view of the various benches of the tribunal that the determination of the tariff heading and the applicable rate of duty is the ultimate job of the customs authorities and if an assessee tentatively indicates a wrong classification according to his understanding, then no motive can be attributed to him and neither the goods can be confiscated nor penalty can be imposed. it is up to the department to bring suitable changes in the legislation, if the intention is to cast some responsibility on the assessees to indicate correct classification and rate of duty for quick clearance under the liberalized system specially made applicable to accredited clients of the department. 7. as such, following the ratio of the precedent decisions cited above, i set aside the impugned order in so far as it relates to the confiscation of the impugned goods, imposition of redemption fine and imposition of penalty. 8. the appeal is allowed in the above terms.
Judgment:

1. Heard both sides.

2. In this appeal, the appellants are not contesting the classification and the rate of duty determined by the Customs authorities. Shri S. Murugappan, Ld. Advocate, appearing for the appellants states that the challenge is limited to confiscation of goods, imposition of redemption fine and penalty imposed on the appellants. He states that the impugned goods imported by the appellants were described as follows along with the Customs Tariff Heading numbers in the Bill of Entry filed by them:-

CTH No.

Description of the items

26169090

Planar Target-Silver-AG 3099*28*12.7 Mono Block Version -3N7-1 No.

26080000

Rotative Target-Zinc-Anal Type Mag or Qct Dim 3191*9/13 MM 3N Direct Cast - 4 Nos.

25059000

Rotative Target - Silica Siai Type Vac-Mag or Qct Dim 3191 *9/13 MM Sprayed - 6 Nos.

3. Both sides agree that on examination, the description indicated by the appellants have not been changed by the assessing officer but only the goods were found to be classifiable under different Chapters viz., 71, 73 and 79 respectively. The appellants have agreed to forgo the exemption initially claimed by them and have paid the applicable duty accepting the classification determined by the customs authorities. The adjudicating Commissioner has confiscated the impugned goods, imposed a redemption fine and has imposed a penalty on the grounds of misdeclaration of the tariff heading and claim for inapplicable exemption. It is the case of the appellants that they have imported the impugned goods for the first time, they were not aware of the correct classification and further that it was for the customs authorities to determine the correct classification. The Ld. Advocate appearing for the appellants states that indicating a wrong classification does not amount to misdeclaration and he seeks support for his argument from the following precedent decisions of the Tribunal:-

1. Jay Kay Exports and Industries Vs. CC, Kolkata

2004 (163) ELT 359 (Tri.- Kolkata)

2. Hindustan National Glass and Ind. Ltd. Vs. CC, Kolkata

2002 (145) ELT 162 (Tri.- Kolkata)

3. Alstom Transport Ltd. Vs. CC, Chennai

2007 (220) ELT 312 (Tri.- Chen.)

4. Raj Television Network Vs. CC, Chennai

2007 (215) ELT 71 (Tri.- Chen.)

He states that as per these decisions, finalization of the tariff heading under which the goods should fall is the ultimate job of the customs authorities and if the appellants have claimed wrong classification according to their limited understanding of the customs law, mens rea cannot be attributed to them nor confiscation and imposition of penalty can be resorted to.

4. Heard the Ld. DR, Ms. Indira Sisupal, who supports the impugned order. She states that the cited decisions are not applicable to this case as the appellants sought clearance of the impugned goods under the Risk Management Scheme and it was obligatory on their part to declare the correct classification and pay the correct rate of duty. She states that since a wrong classification was indicated and duty exemption was claimed by indicating such wrong classification, the appellants cannot escape the redemption fine and penalty which have been rightly imposed in respect of the impugned goods. She states that under the computerized EDI system, unless a particular consignment is picked up at random for detailed scrutiny, goods get assessed as per the declaration and hence it is necessary on the part of the appellants to declare the correct classification.

5. After hearing both sides, I find that the description given by the appellants under the impugned Bill of Entry has not been questioned or changed by the customs authorities after examination and finalization of assessment. Only the declared classification has been changed and the claimed exemption has been denied. The appellants have explained that the wrong classification has been indicated due to ignorance on the part of the appellants apart from stating that this is the first time that such consignments have been imported by them. I also do not find any evidence adduced by the department to controvert the claim of the appellants in regard. It is not a case where the department has found import documents including invoices which indicate a different classification at the port of export but the appellants have deliberately indicated a different entry to evade customs duty and claim lower assessment. Had the department gathered any such evidence, the matter could have been viewed differently. But, no such case has been made out by the customs authorities.

6. The apprehension of the Ld. DR that under the new system of assessment based on computerization and risk management system, if the assessees do not indicate the correct classification and rate of duty, there is likelihood of revenue loss is well founded. But, I find that no change in the law has been made to take into account such apprehension, and hence, however well founded the same may be, in the absence of any legal change, I am unable to accept either the Ld. DRs argument or the finding of the adjudicating Commissioner that the ratio of the case laws cited by the appellants will not be applicable to the facts of this case. It has been the consistent view of the various Benches of the Tribunal that the determination of the tariff heading and the applicable rate of duty is the ultimate job of the customs authorities and if an assessee tentatively indicates a wrong classification according to his understanding, then no motive can be attributed to him and neither the goods can be confiscated nor penalty can be imposed. It is up to the department to bring suitable changes in the legislation, if the intention is to cast some responsibility on the assessees to indicate correct classification and rate of duty for quick clearance under the liberalized system specially made applicable to accredited clients of the department.

7. As such, following the ratio of the precedent decisions cited above, I set aside the impugned order in so far as it relates to the confiscation of the impugned goods, imposition of redemption fine and imposition of penalty.

8. The appeal is allowed in the above terms.