The Delhi Bench of Customs Excise & Service Tax Appellate Tribunal (CESTAT) has held that snow goggles do not fall under the classification of sun glass and set aside the confiscation order under section 111(m) Customs Act 1962 on the ground that the importer classified the goods under a CTH different from the opinion of the officer.
M/s. Aureole Inspecs India Pvt. Ltd, the appellant challenged the Order-in-Original passed by the Principal Commissioner of Customs Air cargo complex (Import), New Delhi. The appellant imported snow goggles which it supplied to the Indian Army as per its contract dated 31 August 2018 to supply 79,245 Snow Goggles.
The appellant filed a Bill of Entry dated 21.9.2019 to clear the snow goggles classifying them under Customs Tariff Heading 90049090 which attracts basic customs duty4 at the rate of 10%. Revenue felt that they were classifiable under CTH 90041000 attracting BCD of 20%.
The Principal Commissioner of Customs issued a Show Cause Notice and rejected the claim seeking classification of the imported goods namely ‘Snow Goggles’ under CTH 90049090 and ordered that the goods be reclassified under CTH 90041000 for which Bills of Entry were filed/presented by M/s Aureole Inspecs (India) Pvt. Ltd.
The Commissioner confirmed the demand of Customs duty and IGST to the tune of Rs. 51,58,683/- (Rupees Fifty-One Lakh Fifty Eight Thousand Six Hundred and Eighty-Three only) on the import and clearance of ‘Snow Goggles’ made by M/s Aureole Inspecs (India) Pvt. Ltd. against the three Bills of Entry as listed in tabular form under para 2 of the SCN under Section 28(1) of the Customs Act, 1962.
The appellant imported ‘Snow Goggles’ to supply to Indian Army as per its contractual obligation. The contract does not place any order for sunglasses nor does it use the terms ‘sunglasses’ and ‘snow goggles’ synonymously. The goods are meant for the protection of eyes in snowy regions and not protection of eyes from sunlight which is the purpose of sunglasses as is common knowledge.
The contract also lays down detailed specifications of the materials, processing, quality control, dimensions, tolerances, workmanship and finish, preinspection, sampling procedure, conformity, test methods, packaging and user instructions.
After examining the contract of the appellant with the Army (to meet which these were imported), a two-member bench comprising Ms Binu Tamta, Member ( Judicial )and Mr P. V. Subba Rao, Member ( Technical ) viewed that they are not sunglasses but are Snow Goggles.
The disputed goods cannot fall under 90041000 (sunglasses) and must fall under 900490 ‘Other’. This heading covers three types of goods viz., passive night vision goggles, prismatic eyeglasses for reading and others. Night vision goggles enable the viewer to see in the dark by converting the infrared rays which are emitted by all objects even in the dark, into visible light.
It was observed by CESTAT that the importer is not an expert in taxation and can make mistakes and he cannot be penalized for making mistakes. The classification is a matter of opinion and the importer’s goods cannot be confiscated nor can he be penalized for his opinion.
“Wrong classification or wrong claim of an exemption notification, in the Bill of Entry even if they are found to be completely incorrect, do not attract section 111(m) or the consequential penalty under section 112 of the Customs Act 1962. “, the CESTAT held.
Subscribe Taxscan Premium to view the JudgmentSupport our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates
