In a multifarious ruling, the Customs, Excise & Service Tax Appellate Tribunal, Chennai ( CESTAT ) clarified that re-determination of classification of Imported Goods cannot be contested if the Importer has duly consented to the classification in writing before the Original Authority during pendency of the proceedings.
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.
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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.
In the present Appeal, Hyundai has, among multiple grounds, sought to challenge the re-determination of classification of 13 items imported by them. The disputed items include Vacuum Assembly; Water Pump Assembly; Cap Sealing; Case Assembly Timing Chain; Nut Flange; Nut Washer; Oil Seal; V-Ribbed Belt; Junction Box;. Piston and Piston Assembly; Connecting Rod Assembly; Camshaft Assembly; PIO AVN Audio.
It was submitted by Commissioner P. Narasimha Rao, appearing for the Revenue that Hyundai had not adduced any detailed submissions in light of their contest of the reclassification. Furthermore, the Revenue submitted that the Importer had by means of two reply letters accepted the redetermination of classification by the Revenue and accepted changes for all the impugned goods; matters being so, Hyundai cannot resile from their given consent and an appeal for change of classification shall not stand.
The two-member Bench of CESTAT, Chennai comprising P. Dinesha, Judicial Member and M. Ajit Kumar, Technical Member observed that Hyundai had made a feeble attempt to contest the reclassification after providing written consent to the Original Authority via 2 letters dated 27.06.2023 and 12.07.2023.
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The Tribunal, referring to the Supreme Court judgment in Lohia Properties Pvt. Ltd., Tinsukia Vs Atmaram Kumar (1993) held that the Tribunal “has an inherent power to prevent the right of appeal being abused by an Appellant who keeps back till the stage of appeal, points of law or fact which he could have raised before the lower authority, without showing any reason and thus places the other side at a disadvantage”.
While dismissing the specific part of the Appeal, the Bench further elucidated that a person who has provided tacit or passive acceptance or implied consent towards an act when he has a duty to speak or oppose the act, fails to oppose said act with full knowledge of the consequences, he shall not have the liberty to contest the same right at a later stage.
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