The Mumbai bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has held that duty is not demandable under Section 28 of the Customs Act, 1962 in absence of evidence showing a mismatch of imported goods and description as per Excise exemption notification.
The appellants challenged the adoption of the rate of duty corresponding to tariff item 8525 8090 of the First Schedule to Customs Tariff Act, 1975, with consequent denial of notification no. 12/2012-Cus dated 17th March 2012 and notification no 50/2017-Cus dated 30th June 2017.
And for the reassessment of ‘cameras’ to duties of customs of ₹ 461,38,438 to recover ₹ 1,86,19,246 as duty short-paid under section 28 of Customs Act, 1962, along with applicable interest under section 28 AA of Customs Act, 1962, in 24 bills of entry filed on import of goods declared to be valued at ₹ 15,36,69,611 besides confiscating the said goods under section 111 (m) of Customs Act, 1962 though without the imposition of any redemption fine.
Another consignment, under import, declared in the bill of entry no. 3308840/20.09.2017 to be valued at ₹ 1,07,13,145 was held as liable for confiscation under section 111 (m) of the Customs Act, 1962 but permitted to be redeemed on payment fine of ₹ 20,00,000 and differential duty of ₹ 44,14,567.
The penalty of ₹ 4,61,38,438 was imposed on the importer under section 114A of the Customs Act, 1962 and penalties of ₹ 10,00,000 each under section 112 of Customs Act, 1962 were imposed on S/Shri Ketan C Patel, Sainath J Shetty, Nitin K Karekar and Prashant Bijai as well as ₹ 4,50,00,000 each under section 114AA of Customs Act, 1962 on S/Shri Ketan C Patel, Sainath J Shetty, Nitin K Karekar and Prashant Bijai are also under challenge in these five appeals.
In the impugned order, it was held that ‘equipment type approval (ETA)’, issued by the Wireless Planning and Coordination wing of the Ministry of Communications, mandated for import of any wireless device has described it as ‘video camera’ and the absence of HSN code in invoices issued to other dealers of the same product indicated their intention all too well and the acceptance of classification determined by the customs authorities in an import effected by the appellant at Nhava Sheva evidence articulates deliberate intent to mis declare the classification for claiming exemption from duty.
The appellant has claimed the benefit of notification no. 12/2012-Cus dated 17th March 2012 for imports effected against bills of entry filed before 1st July 2017 and notification no. 50/2017-Cus dated 30th June 2017 thereafter.
The eligibility for the notification is based on the claim of classification within the description corresponding to tariff item 8525 8020 of First Schedule to Customs Tariff Act, 1975 and, thereafter, to conformity with the ‘digital still image video camera’ describing the article to which the exemption may be allowed.
The declared classification, against tariff item 8525 8020 of the First Schedule to Customs Tariff Act, 1975, cannot be substituted. Nothing on record indicates that the imported goods do not conform to the description that entitles them to the benefit of exemption in the impugned notification.
The Tribunal observed that the rescinding of the Explanation therein has done away with any technical specification that may, at some in the past, have served to segregate ‘digital still image video camera’ as eligible and ineligible for the exemption. The confirmation of demand under section 28 of the Customs Act, 1962 was of no basis in law.
A two-member bench of the tribunal comprising of Mr C J Mathew,(technical) and Mr Ajay Sharma,(judicial) observed that the confiscation under section 111(m) of Customs Act, 1962 in the impugned order is vacated along with consequential redemption fine, if any, as well as any penalties under section 112 of Customs Act, 1962, section 114A of Customs Act, 1962 and section 114AA of Customs Act, 1962. The Tribunal set aside the impugned order and allowed the appeal.
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