No Finality on Classification of Goods: CESTAT reduces Redemption Fine and Penalty [Read Order]

The Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ), Ahmedabad Bench reduced redemption fine and penalty as no finality on classification of goods was arrived.

The appeal is directed against the order passed by Commissioner (Appeals), whereby, redemption fine of Rupees six lakhs and a penalty of Rupees two lakhs was imposed upon the appellant on the alleged charge of misdeclaration of goods in as much as the appellant have declared the goods as Aluminium Extrusion Scrap (Tread) as against Aluminium Tread grade (Aluminium sheet) as claimed by the Department.

The appellant, Shree Keshariyaji Metal Impex while filing the bill of entry as regard objection by the department filed a letter that they need to use these imported goods for melting purpose therefore, they have sought clearance and cleared the goods by paying the duty as demanded by the Department.

Hardik Modh, Counsel appearing on behalf of the appellant submitted that the appellant have submitted a letter to the assessing authority for clearance of the goods considering that they need the material for melting purpose and further submitted that though the appellant have paid the duty as claimed by the department but the fact remains the goods were not Aluminium Tread Grade whereas, the same is Aluminium Scrap therefore, the goods ought not to have been confiscated and no redemption fine or penalty should have been imposed.

A Division Bench consisting of Ramesh Nair, Judicial Member and Raju, Technical Member observed that “It appears that the said goods are used material therefore, the same can be classified as aluminium scrap however, we can only draw a prima facie view on the nature of the goods at this stage as the classification of goods attained finality with the assessment of bill of entry and the same was not challenged.”

“Considering the prima facie view about the goods and in the facts and circumstances of the present case, we are of the view that the redemption fine and penalty imposed by the lower authorities are very excessive and the same deserves to be reduced. Accordingly, we reduce the redemption fine from Rupees six lakhs to Rupees one lakh and penalty is reduced from Rupees two lakhs to Rupees thirty-five thousand.

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