Laesen & Toubro Limited Vs C.C.-Mundra (CESTAT Ahmedabad)
In view of the settled law, irrespective whether the classification claimed by the appellant is correct or not since the classification proposed by the Revenue is absolutely incorrect, the entire case of the Revenue will not sustain. Therefore, we are not addressing the issue that whether the appellant’s classification was correct or otherwise. The appellant also made an alternate submission that even if the classification declared by them under CTH 8306 2110 is incorrect the goods are otherwise classifiable under CTH 9703 in such tariff entry also the IGST Rate is 12% and therefore, there will be no revenue implication. Though alternate classification suggested by the appellant appears to be prima facie correct but since we have already taken a view that Revenue’s claim of classification under CTH 8311 is absolutely incorrect and it is nobody’s case in the Show Cause Notice that the goods are classified under CTH 9703 we are not addressing this issue. However, since the Revenue’s claim of classification is held to be incorrect the entire proceeding of the Revenue is quashed. The impugned order is set aside. The appeal is allowed with consequential relief, if any arise, in accordance with law.
FULL TEXT OF THE CESTAT AHMEDABAD ORDER
The issue involved in the present case is that whether the Bronze Cladding Panel for Statue of Unity Project was classifiable under Customs Tariff Act (CTEH 83119000) as ‘other for kind use for soldering, brazing, welding’ which is subject to IGST @ 18% as ordered by the Respondent or the same was classifiable under CTH 8306 2110 as ‘statuettes’, which is subject to IGST @ 12% as declared by the appellant.
1.1 The brief facts of the case are that in 2014 the appellant won the contract for installation of a statue of Sardar Patel which is called “Statue of Unity” in the State of Gujarat. For the installation of such statue the appellant placed an order with M/s JIANGXI TOQINE METAL CRAFTS CORPORATION LTD., based in China for the fabrication and delivery of Statue. Owing to the size of the statue, it was not possible to have the statue either commissioned and / or delivered as such and hence the same was fabricated in pieces and was shipped in the form of BronzeCladding Panels (Micro Panels) which were delivered in multiple shipments. The said micro panels were reassembled by way of welding process into macro panels and the statue was finally installed at the relevant site in Gujarat. The statue imported as micro panels but the components that were assembled by way of welding i.e. the goods on which such welding process was carried out. The process of assembly by welding was undertaken by using filler metals (welding electrodes of rods). The filler metal i.e. welding electrodes of rods were separately imported and duly classified under CTH 8311. The appellant classified the statue imported in micro panel under the CTH 8306 2110 which is subject to IGST @ 12%. A Show Cause Notice was issued to the appellant alleging that classification ought to have been made under the CTH 8311 9000 which is subject to 18% IGST. The adjudicating authority has held that the classification under CTH 8311, confirmed the demand of differential IGST along with applicable interest and penalty under Section 117 of the Customs Act, 1962. The appellant have challenged the above order of the Adjudicating Authority by way of filing the present appeal.
2. Shri Vishal Agarwal, Learned Counsel along with Ms. Dimple Gohil and Shri. Abhishek Deodhar the Advocates appeared on behalf of the appellant. Shri Vishal submits that Revenue classified the imported goods i.e. Cladding Panel for installation of Statue under CTH 8311. The entry under this head covers goods which are used for welding process and not the goods on which welding process is carried out. The Respondent has failed to give any basis for classification of the goods under CTH 8311. The respondent has merely reproduced the description under CTH 8311 and has concluded that imported goods fall under this category. He submits that it is a settled law that allegations made without adequate explanations are invalid and liable to be set aside on this ground alone. Without prejudice, he further submits that CTH 8311 covers filler metals which are used for welding process and not the base metal on which welding is done. Infact the appellant itself has imported such filler materials from China under CTH 8311 for which no dispute has been raised by the Custom Authority. The imported goods in the present case are not filler metals used for welding but are the base metal on which the welding process is carried out. Without prejudice, he also submits that CTH 8311 also requires that the goods in question be coated or cored with flux material. Such flux material prevents oxidation, impurities etc., in the welding process and hence is added to the filler metals. However, the Bronze Cladding Panel in the present case are parts of the Statue itself on which no coating or coring of flux material has taken place. There is no factual finding to this effect anywhere by the Customs Authority in the impugned order. It is his submission that in the absence of such coating or coring with flux material the item cannot fall under CTH 8311. He submits that the imported goods are correctly classified in CTH 8306 as the same are nothing but the components of the main statue itself. He submits that in view of Rule 2(a) of General Rule for Interpretation of the Schedule which stipulates that an item presented in an unassembled or disassembled form is to be treated as the item as a whole itself. In the present case it is an undisputed fact that imported goods are components or parts of the main statute itself imported in a completely knockdown (CKD) form and hence the same would be classifiable under CTH 8306.
2.1 Learned Counsel submitted additional submission dated 09.02.2021 after hearing took place on 02.02.2021 wherein it is submitted that it is settled law that onus of establishing that the imported product falls under a particular classification entry is squarely upon the Revenue. In this regard, he placed reliance on the following judgements.
