Custom, Excise & Service Tax Tribunal
Benetton India Private Limited vs Commissioner, Customs-New Delhi on 11 July, 2024
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL
NEW DELHI.
PRINCIPAL BENCH, COURT NO. I
E-HEARING
CUSTOMS APPEAL NO. 50957 OF 2021
[Arising out of the Order-in-Appeal No. CC (A)/CUS/D-II/Prev./NCH/205/2021-
2022 dated 21/06/2021 passed by The Commissioner of Customs (Appeal),
New Customs House, New Delhi - 110 037.]
M/s Benetton India Private Limited Appellant
Plot No. 25, Infocity, Sector - 34,
Gurgaon, Haryana - 122 001.
VERSUS
Additional Commissioner, Respondent
Customs (Preventive),
New Customs House,
New Delhi.
APPEARANCE
Shri Ayush A. Mehrotra, Shri Upkar Aggarwal, Advocates - for the
appellant.
Shri Girijesh Kumar, Authorized Representative (DR) - for the
Department
CORAM : HON'BLE SHRI JUSTICE DILIP GUPTA, PRESIDENT
HON'BLE SHRI P.V. SUBBA RAO, MEMBER (TECHNICAL)
FINAL ORDER NO. 56047/2024
DATE OF HEARING/DECISION : 11.07.2024
JUSTICE DILIP GUPTA
This appeal filed by M/s Benetton India Private Limited1
seeks to assail the order dated 21.06.2021 passed by the
Commissioner of Customs (Appeals2) by which the order dated
07.11.2019 passed by the Additional Commissioner has been
1. the appellant
2. the Commissioner (Appeals)
2 CUS/50957 OF 2021
upheld and the appeal has been dismissed. The Additional
Commissioner by the order dated 07.11.2019 classified the goods
imported by the appellant under Customs Tariff Item3 6102 30
10, CTI 6202 9390 and CTI 6210 5000 of the First Schedule to
the Customs Tariff Act, 19754 and confirmed the demand of
differential duty of Rs. 12,71,462/- under section 28 (4) of the
Customs Act, 19625 with penalty. The Additional Commissioner
also confiscated the goods under section 111 (m) of the Customs
Act, but gave an option to the appellant to redeem the
confiscated goods on payment of fine of Rs. 1.50 lakhs.
2. The appellant is engaged in the business of manufacture
and distribution of apparel, footwear and accessories in India. It
imported a consignment of goods containing women‟s 100%
Polyester Knitted Jackets, 100% Polyester Woven Jackets and
100% PU Woven Jackets for which a Bill of Entry dated 14
September 2019 was filed. The goods were classified in the
following manner :-
(a) Knitted Jackets under HSN Code 6104 33 00; and
(b) Woven Jackets and PU Jackets under HSN Code 6204
33 00.
3. However, the Officers of the Customs detained the
consignment of the goods and on examination it was noted by
3. CTI
4. the Tariff Act
5. the Customs Act
3 CUS/50957 OF 2021
them that the goods had a full opening front with a zipper
fastener and, therefore, were required to be reclassified as :
(a) Knitted Jackets under HSN (T) 6102 3010 instead of
HSN Code 6104 3300 ;
(b) Woven Jackets under HSN (T) 6202 9390 instead of
HSN Code 6204 3300 ; and
(c) PU Jackets under HSN Code (T) 6210 5000 instead of
HSN Code 6204 3300.
4. The appellant paid the differential duty amount and
requested for clearance of goods and the goods were cleared.
Thereafter, the appellant also requested for waiver of show cause
notice.
5. On 07.11.2019, the Additional Commissioner passed the
order under section 28 (4) of the Customs Act. This order was
assailed by the appellant before the Commissioner (Appeals). The
appeal has been dismissed by an order dated 21.06.2021.
6. It is this order dated 21.06.2021 that has been assailed in
this appeal.
7. Shri Ayush A. Mehrotra, learned counsel for the appellant
assisted by Shri Upkar Aggarwal submitted that in the facts and
circumstances of the case, the provisions of section 28 (4) of the
Customs Act could not have been invoked. Elaborating this
submission, learned counsel pointed out that the error in the
classification of subject goods was a bonafide mistake and as
4 CUS/50957 OF 2021
soon as this was pointed, the appellant accepted the classification
suggested by the department and paid the differential duty
amount. To support this contention that the provisions of section
28 (4) of the Customs Act could not have been invoked, learned
counsel relied upon an order passed by the Commissioner in
respect of a similar matter where a categorical finding has been
recorded that the provisions of section 28 (4) of the Customs Act
could not have been invoked.
8. Shri Girijesh Kumar, learned authorized representative
appearing for the department, however, supported the impugned
order and submitted that it does not call for any interference in
this appeal.
9. The submissions advanced by the learned counsel for the
appellant and the learned authorized representative appearing for
the department have been considered.
10. The contention that has been advanced by the learned
counsel for the appellant is that the term "jacket" has not been
defined in Chapter 61 or Chapter 62 of the First Schedule to the
Tariff Act. However, the Explanatory Notes for Chapter 61, which
have also been made applicable to Chapter 62, do define „jackets‟
and „Blazers‟ and it is on the basis of the Explanatory Notes that
the department proposed re-classification of the goods. Once the
department suggested this classification, it was accepted by the
appellant and the differential duty amount was paid.
5 CUS/50957 OF 2021
11. It is, therefore, clearly a case of interpretation of the Tariff
entries and willful suppression of facts cannot be attributed in
such a situation for section 28 (4) of the Customs Act to be
applicable. The appellant had declared the details of the imported
goods which were also physically examined. It is also stated that
earlier the Customs Authorities had also examined the previous
classification of subject goods on several occasions and permitted
clearance under the classification adopted by the appellant.
12. The appellant has placed on record the order dated
24.02.2023 passed by the Commissioner in respect of a show
cause notice dated 01.10.2022 issued to the appellant for the
past consignment of goods imported from September 2015 in
which invoking the provisions of section 28 (4) of the Customs
Act were also invoked.
13. The Commissioner, however, not only held that the
provisions of section 28 (4) could not have been invoked, but
also held that sections 111 and 114A could also has not been
invoked. The relevant portion of the order dated 24.02.2023
passed by the Commissioner is reproduced below :-
"41. Consistent with the acceptance regarding mis-
classification, Shri Abhik Saha undertook that they
would pay the differential duty, along with fine and
penalty which arises due to mis-classification. On this
issue, during the personal hearing held before me on
23.01.2023, it was submitted that they have accepted
the change in classification, discharged the differential
duty liability and interest on delayed payment thereof.
6 CUS/50957 OF 2021
42. In view of the above, it is evident that the impugned
goods were mis-classified even during the past period of five
years covered by this SCN. Based on the HSN Notes, the
impugned goods merit re-classification under CTH 6101,
instead of 6103 and 6104, as was done during the self-
assessment. The noticee has accepted the proposed re-
classification.
43. As highlighted earlier, the critical factor resulting in the
proposed reclassification is the fact of the impugned jackets
having full front opening with a closure of slide fastening
(zipper). It is a fact that the presence of the zipper was not
mentioned in the bills of entry filed by the noticee. However, it
has been submitted by the noticee that the Company‟s error
in classification of goods was inadvertent and technical in
nature in light of the Explanatory Notes to the HSN
classification issued by World Customs Organization, which do
not form part of the First Schedule to the Tariff Act and was
without any intention to evade the payment of Customs duty.
I find merit in the submission made by the noticee, that
there is nothing available on file to suggest that the
presence of zipper was required to be disclosed by the
noticee, and failure to do so could be considered as
willful suppression of fact, required to invoke extended
period under section 28 (4). In coming to this
conclusion, I also take note of the fact that atleast
select consignments were physically examined by the
department during the cargo clearance process and the
precise nature of the jackets, including presence of
zipper would have become evident during the said
examination. I observe that upon being informed of the
correct classification as per the HSN, the noticee have
accepted the same and discharged the differential liabilities
promptly, thereby supporting the position that non-disclosure
of the presence of zipper was not a willful suppression of fact.
Therefore, this is a simple case of mis-classification,
wherein provisions of section 28 (4) cannot be invoked.
.........
7 CUS/50957 OF 2021
48. Since this is a simple case of mis-classification, with no mis-declaration and willful suppression of fact with intent to evade the duty, the impugned goods are not liable for confiscation, also noting that these relate to past clearances and are not available for confiscation under section 111 (m) as proposed in the SCN.
49. Since the impugned goods are not liable for confiscation under provisions of section 111, no penalty can be imposed on the noticee either under section 114A in case of section 28 (4) invocable or under section 112, this being a simple case of mis-classification".
(emphasis supplied)
14. The Commissioner has noted in the aforesaid order that there was nothing to suggest presence of willful suppression of facts so as to enable the department to take recourse to the provisions of section 28 (4) of the Customs Act as it was a case of mis-classification only. The Commissioner also noted that once informed, the correct classification was accepted and the differential duty was paid.
15. In view of the findings recorded by the Commissioner in the order dated 24.02.2023, which findings would be applicable in the present case, the impugned order dated 21.06.2021 passed by the Commissioner (Appeals) cannot be sustained and is set aside. The appeal is accordingly allowed.
(Dictated and pronounced in open court.) (JUSTICE DILIP GUPTA) PRESIDENT (P.V. SUBBA RAO) MEMBER (TECHNICAL) PK