Case Law Details
IBM India Private Limited Vs Commissioner of Customs (Import) (CESTAT Mumbai)
The case of IBM India Private Limited vs. Commissioner of Customs (Import) was brought before the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) Mumbai concerning the classification and duty exemption eligibility of imported goods, specifically ‘Small Form-factor Pluggable (SFP) Optical Transceivers’.
Background and Facts: IBM India Private Limited (the appellant) imported various types of Small Form-factor Pluggable (SFP) Optical Transceivers during the period from November 2018 to October 2019. These goods were declared under different Bills of Entry (B/E) as Optical Transceivers, claiming a concessional rate of duty under Sl. No. 20 of Notification No. 57/2017-Customs dated 30.06.2017, as amended. This notification provided for exemptions and duty concessions based on specific tariff classifications.
During a Post Clearance Audit, the Customs department disputed the classification and eligibility of these imports for duty concessions under the said notification. They alleged that IBM incorrectly classified the goods under CTI 8517 6290, meant for Optical Transport Equipment, while the correct classification, according to them, was under CTI 8517 7090, which attracts a higher duty rate.
Procedural History: Following the issuance of a Show Cause Notice by the Customs department on 06.10.2020, alleging misclassification and a demand for differential duty totaling Rs. 36,16,445 under Section 28(1) of the Customs Act, 1962, IBM contested these claims. Subsequently, the Order-in-Original affirmed the department’s findings, prompting IBM to appeal to the Commissioner of Customs (Appeals). However, the Commissioner upheld the original order’s conclusions on 27.01.2022, denying IBM’s claim for duty exemption and determining that the goods should be classified under CTI 8517 7090 instead of the claimed 8517 6290. Dissatisfied with this decision, IBM further appealed to CESTAT Mumbai, seeking relief and challenging both the classification and duty liabilities imposed.
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