Case Law Details
DLF Southern Homes (P) Limited Vs Commissioner of Customs (Imports) (CESTAT Chennai)
In a significant decision dated January 4, 2024, the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) Chennai favored DLF Southern Homes (P) Limited in a classification dispute against the Commissioner of Customs (Imports), Chennai. The case revolved around the import of deformed Steel Bars Grade HRB 500 (TMT Bars) and their eligibility for exemption under Notification No. 21/2002-Cus. This ruling clarifies the application of customs notifications and the importance of expert opinions in the classification of imported goods.
Background: DLF Southern Homes imported 477 MTs of TMT Bars under Customs Tariff Heading (CTH) 7213 1090, claiming exemptions from Basic Customs Duty (BCD) and Counter-vailing Duty (CVD) under specific entries of Notification No. 21/2002-Cus. dated March 1, 2002. Doubts regarding the classification of these bars prompted the Revenue to send samples for analysis to the National Metallurgical Laboratory (NML), which confirmed the goods as ‘TMT Bars Grade 500 Prime Quality’ and non-alloy steel as per IS 7598:1990. Despite this, the final assessment classified 20mm, 25mm, and 32mm TMT Bars as alloy steels, denying them the claimed exemptions.
Legal Proceedings and High Court Directive: Challenging the final assessment, DLF Southern Homes approached the Madras High Court, which remitted the case for re-assessment in accordance with the law, emphasizing the need to provide an opportunity to the importer for representation.
CESTAT Chennai’s Decision: Upon review, CESTAT Chennai identified the core issue as the entitlement of the imported goods to Nil rate of BCD under Notification No. 21/2002-Cus. dated 01.03.2002. The tribunal noted discrepancies in the Revenue’s approach, particularly the disregard for the expert opinion provided by NML and the arbitrary re-classification of the TMT bars without substantial evidence.
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