The Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ), New Delhi Bench ordered re adjudication as when plea of change of classification made is successful, Tariff rate for Customs Duty will become Nil.
The first appeal was filed by the appellant, M/s. Globus Infocomm Ltdto assail the order passed by the Principal Commissioner of Customs by which he decided the Show Cause Notice and confirmed the demand of Rs 2 crores under section 28(4) along with interest under section 28AA, imposed redemption fine of Rs. 40 lakhs in respect of the goods imported, imposed penalty of Rs. 2 crores under section 114A and penalty of Rs. 25 lakhs under section 114AA on the importer.
The second appeal has been filed byAshish Dham, the Managing Director of the importer to assail the imposition of penalty of Rs. 25 lakhs under section 114AA and penalty of Rs. 25 lakhs under section 112(a) (ii) and (b) (ii) on him.
According to the Revenue, the appellant importer wrongly claimed the benefit of notification No.24/2005-Cus dated 1.3.2005 (S.No. 17) and also mis-declared the Retail Sales Price of the imported goods. Consequently, the differential duty demand was confirmed invoking extended period of limitation and the imported goods were held liable for confiscation and fine and penalties were imposed.
The differential duty was confirmed on the ground that the appellant had wrongly availed the benefit of exemption notification No. 2/2005-Cus. Dated 1.3.2005 (S.No. 17) for the basic customs duty. As far as the additional duty of customs is concerned, it is to be paid at the rates indicated in the Central Excise tariff.
The goods in question were leviable to central excise duty on the basis of the Retail Sales Price (RSP) because they were notified under Section 3A of the Central Excise Act and the appellant paid Additional Duty of Customs declaring the RSP.
The Counsel for the appellant submitted if this classification is accepted, the other issues become irrelevant. The basic customs duty on the goods will be NIL as per the tariff and therefore, there is no need to claim the exemption notification. The dispute regarding the mis-declaration of RSP also becomes irrelevant because, if this classification is accepted, assessment of additional duty of Customs will be based on the value plus Basic Customs Duty (BCD) and not be based on the RSP because goods under 84714190 are not notified under section 3A of the Central Excise Act.
A Coram comprising Justice Dilip Gupta, President and PV Subba Rao, Technical Member observed that “This claim of classification is significant as, according to the learned counsel, the tariff rate for the Basic Customs Duty itself will be NIL and the exemption notification in dispute becomes irrelevant.”
“We are of the considered view that the Principal Commissioner should get an opportunity to examine this claim for classification under CTH 84714190 which the appellant has now made and the consequential effects on demand of duty, effect of alleged mis-declaration of RSP, confiscation, fine, penalty, etc” the Tribunal noted.
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