Case Law Details
Globus Infocomm Ltd. Vs Principal Commissioner of Customs (Import) (CESTAT Delhi)
The Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) in the case of Globus Infocomm Ltd. vs. Principal Commissioner of Customs (Import) has accepted the plea for a change of classification. The tribunal ordered the Principal Commissioner to re-examine the classification, duty demands, allegations of mis-declaration, and penalties imposed in light of the new classification plea raised by the appellant.
Background:
- Globus Infocomm Ltd. appealed against the order passed by the Principal Commissioner of Customs (Import), which confirmed the demand for differential duty, imposed fines and penalties, and alleged mis-declaration of the Retail Sales Price (RSP).
- The disputed goods were LED displays for ADP machines, and the appellant had claimed the benefit of an exemption notification while also declaring the RSP for additional duty calculation.
New Classification Plea:
- The appellant’s counsel raised a new plea for classifying the goods under Customs Tariff Heading (CTH) 84714190, which would result in a nil rate of basic customs duty and render the exemption notification irrelevant.
- According to the counsel, goods classified under CTH 84714190 are not covered by Section 3A of the Central Excise Act and the Legal Metrology Rules, thereby eliminating the need for RSP-based additional duty calculation.
Re-Examination and Consequential Effects:
- CESTAT acknowledged the significance of the new classification plea and its potential impact on duty demands, mis-declaration allegations, confiscation, fines, and penalties.
- The tribunal determined that the Principal Commissioner should be given an opportunity to examine the claim for classification under CTH 84714190 and assess its consequential effects on various aspects of the case.
Conclusion: CESTAT allowed the appeals filed by Globus Infocomm Ltd. and directed the Principal Commissioner of Customs (Import) to re-examine the claim for classification under CTH 84714190. The tribunal emphasized the need to consider the consequential effects on duty demands, mis-declaration allegations, confiscation, fines, and penalties. This decision highlights the importance of re-evaluating the classification plea and its potential impact on the entire case.
FULL TEXT OF THE CESTAT DELHI ORDER
Customs Appeal No. 50285 of 2022 has been filed by M/s. Globus Infocomm Ltd. 1 to assail the order dated 18.10.2021 2 passed by the Principal Commissioner of Customs (Imports) 3 Inland Container Depot 4 by which he decided the Show Cause Notice 5 dated 9.12.2020 and confirmed the demand of Rs. 2,94,66,455/- under section 28(4) along with interest under section 28AA, imposed redemption fine of Rs. 40,00,000/- in respect of the goods imported under one Bill of Entry where the assessment was still provisional, imposed penalty of Rs. 2,95,66,455 under section 114A and penalty of Rs. 25,00,000/-under section 114AA on the importer.
2. Customs Appeal No. 50288 of 2022 has been filed by Shri Ashish Dham6the Managing Director of the importer to assail the imposition of penalty of Rs. 25,00,000/- under section 114AA and penalty of Rs. 25,00,000/- under section 112(a) (ii) & (b) (ii) on him.
3. According to the Revenue, the appellant importer wrongly claimed the benefit of notification No.24/2005-Cus dated 1.3.2005 (S.No. 17) and also mis-declared the Retail Sales Price 7 of the imported goods. Consequently, the differential duty demand was confirmed invoking extended period of limitation and the imported goods were held liable for confiscation and fine and penalties were imposed. The goods in question are (i) TWB-E65 Hitevision 65” LED Display for ADP Machine (VDU), (ii)TWB-UBC75 Hitevision 75” LED Display for ADP Machine (VDU) and (iii)TWB-UBC 86 Hitevision 86” LED Display for ADP Machine (VDU).
4. The differential duty was confirmed on the ground that the appellant had wrongly availed the benefit of exemption notification No. 2/2005-Cus. Dated 1.3.2005 (S.No. 17) for the basic customs duty. As far as the additional duty of customs is concerned, it is to be paid at the rates indicated in the Central Excise tariff. The goods in question were leviable to central excise duty on the basis of the Retail Sales Price (RSP) because they were notified under Section 3A of the Central Excise Act and the appellant paid Additional Duty of Customs declaring the RSP. The finding in the impugned order is that the appellant had mis-declared the RSP and the imported goods were, in fact, being sold at much higher prices. This was the second ground on which the differential duty was confirmed in the impugned order. Related issues are the applicability of extended period of limitation, liability of the goods to confiscation, penalties, etc.
5. After these appeals were filed, the appellant importer filed a miscellaneous application no. C/Misc/50357/2022 to plead an additional ground in Customs Appeal No. C/50285 of 2022 that the imported goods deserve to be classified under Customs Tariff Heading8 84714190 as per the ratio of the order of this Tribunal in the case of Ingram Micro India Pvt. Ltd. vs. Principal Commissioner of Customs (Import) New Delhi9.
6. Learned counsel submits that if this classification is accepted, the other issues become irrelevant. The basic customs duty on the goods will be NIL as per the tariff and therefore, there is no need to claim the exemption notification.
7. According to the learned counsel the dispute regarding the mis-declaration of RSP also becomes irrelevant because, if this classification is accepted, assessment of additional duty of Customs will be based on the value plus BCD and not be based on the RSP because goods under 84714190 are not notified under section 3A of the Central Excise Act.
8. Further, according to the learned counsel the confiscation of the goods, fine, penalties, etc. also cannot sustain as a consequence to the revised classification.
9. Learned authorised representative supports the impugned order.
10. Having considered the rival submissions, we find that a new plea of change of classification to CTH84714190 is raised by the learned counsel before us which was neither raised before the Principal Commissioner nor was it considered in the impugned order. This claim of classification is significant as, according to the learned counsel, the tariff rate for the Basic Customs Duty itself will be NIL and the exemption notification in dispute becomes irrelevant. It is also significant because of the claim of the learned counsel that goods falling under CTH 84714190 are not covered by Section 3A of the Central Excise Act read with the Legal Metrology Rules and therefore, Additional Duty of Customs does not have to be determined as per the RSP. If it is so, then the allegation of mis-declaration of RSP will require re-examination. Additional Duty of Customs may also have to be re-determined. Consequently, it needs to be examined if the confiscation, fine, penalty, etc. still survive.
11. We are of the considered view that the Principal Commissioner should get an opportunity to examine this claim for classification under CTH 84714190 which the appellant has now made and the consequential effects on demand of duty, effect of alleged mis-declaration of RSP, confiscation, fine, penalty, etc.
12. In view of the above, both appeals are allowed by way of remand to the Principal Commissioner to examine the claim of the appellant for classification under CTH 84714190 and consequential effects on confiscation, fine, penalty, duty, etc.
[Order Pronounced on 13.12.2022]
Notes:-
1 the importer
2 the impugned order
3 the Principal Commissioner
4 ICD
5 SCN
6 Dham
7 RSP
3 the Principal Commissioner
4 ICD
5 SCN
6 Dham
7 RSP
8 CTH
9 2022(2) TMI 308-CESTAT NEW DELHI
