The Customs, Excise & Service Tax Appellate Tribunal, Chennai (CESTAT) recently absolved Hyundai Motors from the imposition of penalty or redemption fine in llight of being satisfied that there had been no wilful suppression of facts or production of mis-statement by Hyundai.
The decision was rendered by CESTAT while hearing multiple Customs Appeals filed by Hyundai Motors India Ltd. (Hyundai), Kanchipuram, a prominent manufacturer of passenger motor cars, against the Commissioner of Customs and vice versa. Hyundai imports various parts and accessories for use in their passenger motor cars and is involved in a number of taxation processes to facilitate their business.
The Directorate of Revenue Intelligence (DRI), on the basis of intelligence received by them, alleged that Hyundai had misclassified various goods imported by them to illicitly avail Basic Customs Duty (BCD) exemption in light of exemption Notification No. 152/2009-Customs dated 31.12.2009. The Notification provides Exemption of Customs duty on certain goods when imported into India from the Republic of Korea.
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The key issue alleged by the Customs against Hyundai Motors was regarding the redetermination of classification of Custom Tariff Headings (CTH) of the goods imported by Hyundai.
M. Manickam, appearing for Hyundai submitted before CESTAT that there are no specific allegations within the Show-Cause Notices (SCN) issued and that there is no question of wilful misdeclaration of description or value or any other relevant information at the time of filing the Bills of Entry.
The two-member Bench of CESTAT, Chennai comprising P. Dinesha, Judicial Member and M. Ajit Kumar, Technical Member observed that the sole case purported against the Appellant by the Adjudicating Authority is founded on the fact that the Revenue disagreed with some of the classification of the goods imported by Hyundai.
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The Customs, Excise & Service Tax Appellate Tribunal, Chennai held that in the event assessment itself has not been completed and the classification of goods have been finalised prematurely, the question of confiscation of goods or imposition of fine or penalty thereof does not even arise.
In light of the observations, the Bench affirmed that Hyundai had at no point during the matters leading up to the case been found to be indulged in blameworthy behaviour, hence, “The appeal filed by revenue pertaining to the confiscation of goods provisionally assessed under a bond and confiscation / imposition of redemption fine on the goods and a penalty on the assessee, fails”.
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