Misclassification of Wheel Loaders not done with Mala Fide Intentions as evident from Conduct of Importer: CESTAT [Read Order]

The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Chennai Bench, held that misclassification of wheel loaders was not done with mala fide intentions as can be evidenced from the conduct of the importer.

The facts are that the Revenue felt that the classification of wheel loaders by the importer was incorrect and was done to avail concessional rate of duty. This allegation prompted the Commissioner to issue notices proposing the imposition of penalty under Sections 112 (a) and 114AA.

The CESTAT referred to an earlier case of M/s. Larsen & Toubro Limited, Mumbai wherein it was held that the demand of duty, interest and penalty should be restricted to the normal period alone. The Tribunal felt that the classification issue was an interpretational one, and no mala fides could be impregnated into the conduct of the importer.

Therefore, the bench held that the appellant cannot be found at fault for simply filing the Bills of Entry at the instructions of the importer. It was observed that there was no justification in imposing or confirming penalties under Sections 112(a) and 114AA.

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