Classification Dispute: Bombay HC set-aside Customs Order on Centrifuges Import

Pall India Private Limited Vs Union of India & Ors. (Bombay High Court)

The petitioner is an importer. It imported, at Mumbai Customs, centrifuges as an apparatus to be used for machinery. It claimed classification under chapter heading 8421. The Revenue contended that it would merit classification under chapter heading 3926 as “other articles of plastic”. The petitioner contended that specific heading would prevail over general. A speaking order came to be passed holding that classification under 8421 is correct. The petitioner imported another consignment at Nhava Sheva port. The same dispute was raised. The petitioner informed stating that the said classification has been accepted by the department. However, ignoring the same, show cause notice came to be issued. The same was challenged in the writ petition. In the mean time, ex-parte order came to be passed. The same was also impugned in the writ petition.

The Hon’ble Bombay High Court has set aside the impugned order and allowed the writ petition.

It held:

(i) prima facie, there is merit in the contention of the petitioner that the imported goods would merit classification under chapter heading 8421;

(ii) the statement of the authorised representative was recorded and order passed by Mumbai customs was brought to the notice of the department; yet there is no discussion in the show cause notice or the impugned order;

(iii) the petitioner ought to have replied to the show cause notice and mere filing a copy of the writ petition is not enough;

(iv) accordingly, impugned order was set aside and the matter was remitted for de-novo consideration.

The matter was argued by Ld. Counsel Bharat Raichandani along with Jasmine Dixit

FULL TEXT OF THE JUDGMENT/ORDER OF BOMBAY HIGH COURT

1. The issue in the petition relates to classification of the goods imported by Petitioner. In the bill of entry filed Petitioner has classified the goods under Custom Tariff Item 8421, whereas it is Department’s case that it should have been under It is Petitioner’s case that in an earlier consignment which was imported through Mumbai, the Department accepted by a speaking order dated 23^rd November 2022 that the same goods would fall under the heading 8421 of Customs Tariff Act, 1975. It is Petitioner’s case that this order was also brought to the notice of the Department, when Petitioner’s representative’s statement was recorded on 18^th July 2023. Mr. Raichandani submitted that though in the show cause notice there is a reference to this statement, there is no discussion.

2. Mishra submitted that the impugned order dated 26^th March 2024 expressly provides that Petitioner did not reply to the show cause notice nor attended the personal hearing. Mr. Raichandani submitted that admittedly Petitioner had made available a copy of this petition and the Adjudicating Authority could have considered the petition as the reply and passed appropriate orders. Though we do not agree with the stand taken by Mr. Raichandani because we feel Petitioner was duty bound to reply and also attend personal hearing, we would still interfere inasmuch as Petitioner has a prima-facie case that the goods imported could be classified under Customs Tariff Item 8421. Moreover, the Adjudicating Authority even before issuance of show cause notice dated 31^st August 2023, had before him the statement dated 18^th July 2023 which he ought to have considered and dealt with in the show cause notice and not merely referred to and leave it. Mr. Mishra in fairness states the statement itself forms a part of the show cause notice and is also relied upon document. Strangely, the show cause notice does not deal with the statement. Atleast at the adjudication stage while the impugned order was passed it should have been dealt with which has not been done.

3. Therefore, as we find Petitioner has not participated and the Adjudicating Authority not considered all documents, we hereby quash and set aside the impugned order 26^th March The matter is remanded to Respondent No.2 for denovo consideration. Mr. Raichandani states that on or before 1^st October 2024, Petitioner will file a reply to the show cause notice and also attend personal hearing as and when called upon. We direct Respondent No.2 to give atleast 5 working days advance notice for the personal hearing. The order to be passed shall deal with all submissions of Petitioner.

4. All rights and contentions of the parties are kept open.

5. Petition disposed.