Custom, Excise & Service Tax Tribunal
Sirthai Superware India Ltd vs Cc (Nhava Sheva-Iii ) Mumbai on 10 October, 2019
CUSTOMS, EXCISE & SERVICE TAX APPELLATE
TRIBUNAL, MUMBAI
REGIONAL BENCH
Customs Appeal No. 85603 of 2017
(Arising out of Order-in-Original No. 91/2016-17/Commr./NS-III/JNCH
dated 06.01.2017 passed by Commissioner of Customs, NS-III, JNCH,
Nhava Sheva)
M/s. Sirthai Superware India Ltd. Appellant
SM-22, GIDC, Sanand-II,
Village Bol,
Ahmedabad 382 170.
Vs.
Commr. of Customs, Nhava Sheva-III Respondent
Jawaharlal Nehru Custom House, Sheva, Tal. Uran, Dist. Raigad - 400 707.
Appearance:
Shri N.D. George, Advocate, for the Appellant Shri Dharmender Singh, Authorised Representative for the Respondent CORAM:
Hon'ble Mr. S.K. Mohanty, Member (Judicial) Hon'ble Mr. Sanjiv Srivastava, Member (Technical) FINAL ORDER NO. A/86791/2019 Date of Hearing: 14.06.2019 Date of Decision: 10.10.2019 PER: SANJIV SRIVASTAVA This appeal is directed against the order in original No. 01/2016-17/Commr/NS-III/NCH dated 06.01.2017 of the Commissioner of Customs, Nhava Sheva III. By the impugned order Commissioner held as follows:
"48. In view of above, I pass following orders:
(a) I order that the Bills of Entry mentioned at Sr No 1 to 7 in the table above, be finally assessed by classifying the goods under tariff heading 39241090;
2 C/85603/2017
(b) I confirm the demand of differential Customs duty amounting to Rs 82,58,594/- (Rupees Eighty Two Lakhs Fifty Eight Thousand Five Hundred and Ninety Four Only) in respect of the Bill of Entries mentioned at Sl No 8 to 69 of Table above under Section 28(8) of the Customs Act, 1962.
(c) I confirm demand of applicable interest on the differential Customs duty under Section 28AA of the Customs Act, 1962.
(d) I order to appropriate the amount of Rs 10,00,000/- (Rupees Ten Lakhs only paid by the importer during investigation vide cash challan No HC 904 dated 30.03.2016 against the liabilities of duty and interest.
(e) I hold that the goods imported under the Bill of Entries mentioned in table above are liable for confiscation under Section 111(M) and Section111
(o) of the Customs Act, 1962, however the goods are not available for actual confiscation.
(f) I impose a Penalty of Rs 82,58,594/- (Rupees Eighty Two Lakhs Fifty Eight Thousand Five Hundred and Ninety Four Only) on M/s Srithai Superware India Pvt Ltd under Section 114A of the Customs Act, 1962.
(g) I impose a Penalty of Rs 1,00,000/- (Rupees One Lakh Only) on M/s Srithai Superware India Pvt Ltd under Section 112(a) of the Customs Act, 1962.
(h) I impose a Penalty of Rs 1,00,000/- (Rupees One Lakh Only) on M/s Kwick Cargo Tracers and Lifters under Section 112(a) of the Customs Act, 1962."
2.1 Appellant had imported certain goods and for clearance of the same had filed 69 Bill of Entries during the period 7.09.2012 to 17.06.2015. They had imported "Melamine ware viz Kitchenware and Tableware" by classifying them under CTH 39249090, and had availed the 3 C/85603/2017 benefit of exemption under Notification No 46/2011-Cus dated 01.06.2011 (Sl No 493(1)).
2.2 Subsequent to clearance of the goods, revenue found that the goods were correctly classifiable under CTH 39241090 and the benefit under the Notification No 46/2011-Cus was not admissible to them. Accordingly investigations were under taken, statements of the Manager and Director of the Appellant, Custom House Agent were recorded under Section 108 of the Customs Act, 1962.
2.3 A show cause notice dated 28.04.2016 was issued to the appellant asking them to show cause as to why
(a) Total differential Customs duty amounting to Rs 88,28,311/- (Rs. Eighty Eight Lac Twenty Eight Thousand Three Hundred and Eleven only) as detailed in the Table I above, should not be demanded and recovered from them under provisions to section 28(4) of the Customs Act, 1962;
(b) Interest at prescribed rate should not be recovered from them on the differential Customs duty under section 28AA of the Customs Act, 1962;
(c) The amount of Rupees 10,00,000/- (Rupees Ten Lakh only) paid by the importer during investigations, vide cash Challan No HC 904 dated 30.03.2016, should not be appropriated against the liabilities of duty, interest or penalty, as adjudged under the Customs Act, 1962;
(d) The goods imported under Bill of Entry mentioned in Table 1 above, should not be confiscated under Section 111(m) and Section 111 (o) of the Customs Act, 1962;
(e) Penalty should not be imposed on the importer under Section 112 (a) and Section 114A of the Customs Act, 1962;
4 C/85603/2017 2.4 The show cause notice was adjudicated by the Commissioner by the impugned order referred in para 1, supra. Aggrieved by the impugned order appellants have preferred this appeal.
3.1 We have heard Shri N D George, Advocate for the Appellant and Shri Dharmender Singh, Superintendent, Authorized Representative for the Revenue.
3.2 Arguing for the appellant learned advocate while reiterating the submissions made in the appeal submitted that-
The imported goods are correctly classifiable under the heading 3929090 and benefit of exemption under Notification No 46/2011-Cus is correctly admissible to them;
It is settled law that if the goods can be classified under two headings then the assessee could have chosen the heading which was more beneficial to them [Minwool Rock Fibres Ltd {2012 (278) ELT 581 (SC)];
They have not made any mis-declaration in respect of description, quantity and value, even if the classification as made by them or exemption claimed by them is found erroneous then the same is on account bonafide belief or error and hence cannot be made the ground for invoking extended period as provided for under Section 28 of the Customs Act, 1962, or for demanding interest under section 28AA ibid;
Hon'ble Supreme Court has univocally laid down the law in this respect in case of Northern Plastic [1998 (101) ELT 549 9SC)], Jaiprakash Industries Ltd [2002 (146) ELT 481 (SC)] stating that such bonafide mistakes cannot be mis declaration with the intention to evade payment of duty;
Since the charge of mis-declaration cannot be sustained invoking extended period as provided by 5 C/85603/2017 Section 28(4) of Customs Act is not justified and also the penalty under Section 114A ibid; Also in absence of any misdeclaration in respect of quantity, description and value impugned order holding that goods are liable for confiscation under Section 111(m) and 111(o) cannot be sustained and accordingly the penalty under section 112(a0 needs to be set aside.
They had asked for the cross examination of the persons whose statement have been relied upon. However Commissioner has denied the same. Denial of cross examination of persons whose statement has been relied upon for issuing the show cause notice is violation of natural justice as has been held by the Hon'ble Supreme Court in case of Andaman Timber Industries [2015 3.3 Arguing for the revenue learned Authorized Representative while reiterating the findings in the impugned order submitted that-
The classification of the imported goods which in fact are table ware and kitchen ware has been rightly held by the Commissioner under CTH 39241090. These goods could not have been classified under heading 39249090 which is residuary entry when a specific tariff entry has been provided for the said goods.
Since the goods are correctly classifiable under heading 39241090, the benefit of exemption under Notification No 46/2011-Cus, is not admissible as the same is available only in respect of the goods classifiable under CTH 392490.
By claiming wrong classification and exemption in the situation when the appellants have been allowed to make self assessment, they have misdeclared with intention to evade payment of duty and extended 6 C/85603/2017 period of limitation has been rightly invoked for demanding the duty short paid from them. Since they have misdeclared the goods have been rightly held to be liable for confiscation under Section 111(m) and 111(o). However since the goods were not available for confiscation they have not been confiscated. However by holding the goods liable for confiscation penalty under Section 112(a) is justified. In view the fact that appellants have misdeclared with intention to evade payment of duty, penalty under Section 114A is justified.
4.1 We have considered the impugned order with the submissions made in appeal and during the course of argument on appeal.
4.2.1 The issue for consideration, is in respect of the correct classification of the imported goods. Competing and the disputed tariff entries are reproduced below 3924 Tableware, Kitchenware, Other Household Articles And Hygienic Or Toilet Articles, Of Plastics 392410 - Tableware and Kitchenware 39241010 --- Insulated ware 39241090 --- Other 392490 - Other 39249010 --- Toilet ware 39249020 --- Insulated ware 39249090 --- Other 4.2.2 From the scheme of the tariff entries it is quite evident that Tableware and Kitchenware, have been specifically mentioned and classified under heading 392410. While other household articles and hygienic or toilet articles, of plastics, have been grouped together and put under heading 392490, under description of others. It is general principle of classification that specific entry should be preferred over the general entry. Rule 3(a) of General Rules of Interpretation of Tariff read as follows:
7 C/85603/2017 "3. When by application of rule 2(b) or for any other reason, goods are, prima facie, classifiable under two or more headings, classification shall be effected as follows:
(a) The heading which provides the most specific description shall be preferred to headings providing a more general description. However, when two or more headings each refer to part only of the materials or substances contained in mixed or composite goods or to part only of the items in a set put up for retail sale, those headings are to be regarded as equally specific in relation to those goods, even if one of them gives a more complete or precise description of the goods."
The dispute in the present case is not vis a vis the applicability of two entries in the tariff, for which the Apex Court has in case of Minwool Rock Fibres Ltd has held as follows:
"13. We have already noticed the relevant entries to which we are concerned with in this appeal. No doubt there is a specific entry which speaks of Slagwool and Rockwool under Sub-heading No. 6803.00, but there is yet another entry which is consciously introduced by the Legislature under sub-heading No. 6807.10, which speaks of goods in which Rockwool, Slagwool and products thereof are manufactured by use of more than 25% by weight of blast furnace slag. It is not in dispute that the goods in question are those goods in which more than 25% by weight of one or more of red mud, press mud or blast furnace slag is used. If that be the case, then, in a classification dispute, an entry which is beneficial to the assessee requires to be applied and the same has been done by the adjudicating authority, which has been confirmed by the Tribunal. Alternatively, it can be said that Sub-heading No. 6807 is specific to the goods in which more than 25% by weight, red mud, press mud or blast furnace slag is used. The heading is based entirely on material used on composition 8 C/85603/2017 of goods. A tariff heading, based on composition of goods, is also specific heading like a heading based on commercial nomenclature. Therefore, we are of the view that the goods in issue are appropriately classifiable under Sub- heading No. 6807.10 of the tariff entry."
We do not find the said judgement of Supreme Court to be applicable to the present the case when the two entries have completely separate description and scope. Commissioner has in para 30-33 of his order recorded as follows:
"30. From the perusal of case documents, I find that the description of the goods mentioned by the importer in the invoices / Bills of Entry is "MELAMINEWARES". Some of the descriptions are reproduced as below:
(MELAMINEWARES: EXTRA BRAND) 3 PCS PICKLE SET (MELAMINEWARES: EXTRA BRAND) BUTTER DISH (MELAMINEWARES: EXTRA BRAND) 4 PCS SHORT TUMBLER (MELAMINEWARES: EXTRA BRAND) 2 PCS SPOON (MELAMINEWARES: EXTRA BRAND) CASSEROLE BOWL Etcetera
31. In his statement dated 28.10.2015, Shri Anil Garg, the Manager (Accounts) of the importer has stated that
(i) the importer is engaged in trading, import and distribution of Tableware and Kitchenware and other household articles of melamine and plastic mainly imported from Thailand.
(ii) They were using the same classification CTH 3924 10 90 in the previous years until the overseas supplier provided the Certificate of Origin and informed that there is some preferential trade agreement between India and Thailand for import of melamine and the products are covered and classified under CTH 3924 90 90.
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(iii) From the definition of Tableware and Kitchenware, he agreed that the goods were wrongly classified under CTH 39249090.
32. Further, in his statement dated 14.01.2016, Shri Rakesh Singh, the Managing Director of the importer has stated that
(i) the importer mainly imports Tableware and Kitchenware and other household articles of melamine and plastic mainly from Thailand.
(ii) the importer consignments were also having tableware and kitchenware products.
(iii) From the definition of Tableware and Kitchenware, he agreed that the goods were wrongly classified under CTH 39249090, however, it was without any mala-fide intention.
33. From the description mentioned in the Bills of Entry/invoices and also as confirmed during the statements given by the Managing Director and Manager of the importer, there appears to be no doubt that the goods imported by the importer are squarely covered within the definition of "Tableware and Kitchenware" as contained in the HSN. The above classification has been accepted by the importer during the personal hearing. Therefore, as far as classification is concerned, the goods are correctly classifiable under tariff heading 3924 10."
4.2.3 From the description of the goods given on the Bill of Entry and the invoices relating to the import describing the goods as "Pickle Set", "Butter Dish", "Short Tumbler", "Spoon", "Casserole Bowl" etc., we are convinced that the goods were appropriately classifiable under heading 10 C/85603/2017 392410 and not under heading 392490 as claimed by the appellant.
4.2.4 Sl No 493 of the Exemption Notification No 46/2011- Cus date 01.06.2011 reads as follows:
"In exercise of the powers conferred by sub-section (1) of section 25 of the Customs Act, 1962 (52 of 1962), and in supersession of the notification of the Government of India, in the Ministry of Finance (Department of Revenue), No. 153/2009-Customs dated the 31st December, 2009 [G.S.R. 944 (E), dated the 31st December, 2009], except as respects things done or omitted to be done before such supersession, the Central Government, being satisfied that it is necessary in the public interest so to do, hereby exempts goods of the description as specified in column (3) of the Table appended hereto and falling under the Chapter, Heading, Sub-heading or tariff item of the First Schedule to the Customs Tariff Act, 1975 (51 of 1975) as specified in the corresponding entry in column (2) of the said Table, from so much of the duty of customs leviable thereon as is in excess of the amount calculated at the rate specified in,-
column (4) of the said Table, when imported into the Republic of India from a country listed in APPENDIX I; or column (5) of the said Table, when imported into the Republic of India from a country listed in APPENDIX II .
S No Chapter Description Rate in percentage
Heading, (unless otherwise
Subheading specified)
and Tariff (i) (ii)
item
(1) (2) (3) (4) (5)
493 392490 All Goods 7 (01.06.2012 - 8
31.12.2013)
6 (from 7
01.01.2014)
From the plain reading of the notification it is evident that the said exemption is available only in respect of the goods classifiable under tariff heading 392490 and not under heading 392410. Hence the order of Commissioner 11 C/85603/2017 denying the benefit of exemption under this notification cannot be faulted with.
4.3 For invoking extended period of limitation as provided for by Section 28(4) of the Customs Act, 1962, Commissioner has in his order recorded as follows:
"38. Section 17 of the Customs Act, 1962, as amended vide Finance Act, 2011, introduced the concept of 'Self- Assessment' in Customs. Section 17 of the Customs Act, amended with effect from 8.4.2011, provides for self- assessment of duty on imported goods by the importer himself. Thus, under self-assessment the importer has to ensure that he declares the correct classification, applicable rate of duty, value, benefit of exemption notifications claimed, if any, in respect of the imported goods while presenting Bill of Entry. Thus, it is pertinent to bring this here that with the introduction of self- assessment by amendments to Section 17, since April. 2011, the onus has shifted on the importer to declare the correct description, value notification, etc and to correctly classify, determine and pay the duty applicable in respect of the imported goods.
39. Shr Anil Garg, Manager (Accounts) of the importer, in his statement dated 28.10.2015 has categorically accepted that they were also using the same classification i.e CTH 39241090 in the previous years until their supplier provided the certificate of origin and informed that there is some preferential trade agreement between India and Thailand.
40. In their statements the Managing Director and Manager (Accounts) of the Importer has accepted, without any demur, that the classification of goods were wrongly mentioned in the Bills of Entry. If this suppression is read with the fact that the same importer was declaring the same goods under CTH 3924 10 earlier, and only after the introduction of benefit under Notification No. 46/2011 they started classifying their goods under CTH 3924 90, it 12 C/85603/2017 becomes abundantly clear that the suppression was willful and with an intention to evade customs duty. 41.1 In their submissions before the Adjudicating Authority, Shri N.D. George, Advocate representing M/s Srithai Superware India Ltd argued that the classification of the goods are mentioned in the invoices and Certificate of Origin provided by the overseas supplier, as per their knowledge and belief as per identical and similar goods supplied to their buyers allover the worlds which is declared in the Bill of Entry by the CHA.
41.2 Here it is necessary to highlight the fact that the overseas supplier and the importer are related to each other and the importer is a holding company of the overseas supplier. Therefore, it cannot be assumed that the overseas supplier has acted independently based on their own knowledge. Certainly, the action of overseas supplier is in consonance with the requirements of the importer and for the benefit of importer. Thus the importer cannot claim that the CTH provided by the overseas supplier was independently decided and it was not vitiated or influenced by their relationship. Moreover, they did not provide any evidence in support of their claim that the same practice was adopted by them for other overseas buyers, too.
41.3 The importer has argued that it is for the assessing officer to verify the classification at the time of assessment as to whether the goods can be assessed as per the declared CTH. After introduction of 'Self Assessment' in Customs, the onus to declare correctly and truthfully rests on the importer who files the Bills of Entry, and the role of assessing officer is to verify the veracity of these declarations. The importer has mentioned the description of goods as 'MELAMINEWARES' and has conveniently ignored the true description and nature of the goods which were 'Tableware j Kitchenware'. In the absence of true description of goods, it is not possible for assessing officer to raise any doubt on the goods. It is the Special 13 C/85603/2017 Investigation and Intelligence Branch of the Custom House, who on the basis of their generated intelligence came to know about the misdeclaration.
41.4 They have relied on the judgment in the case of Northern Plastic Ltd. v. CC - 1998 (101) ELT 549 (SC) - where it is held that - Description of goods given correctly and fully in bill of entry, classification declaration and laying claim to some exemption, whether admissible or not, is a matter of belief of assessee and does not amount to mis-declaration.
41.5 It is an admitted fact that the importer themselves were classifying their goods under CTH 3924 10, till 2011 and it is only after introduction of exemption notification 46/2011 they changed their classification to CTH 3924 90. It is evident that this change has been initiated solely with the intention to wrongfully claim the benefit of the exemption notification. Since the goods falling under CTH "3924 10 - Tableware and Kitchenware" were specifically excluded from the ambit of the exemption under this notification, the importer willfully misclassified the goods to cover them under this exemption notification. Otherwise, I do not find any valid reason put forth by the importer in support of their change in previously established classification. The instant case is clearly distinguished from a case where an importer has a genuine belief that the imported goods are classifiable under a particular tariff heading and the department continues to accept the same classification which though on a later date is found incorrect. Therefore, the judgement in the case of Northern Plastic Ltd. v. CC does not come to rescue the importer.
42. Thus, I find that by their act of willful suppression of the correct classification of the goods with an intention to evade the customs duty, the importer has made the goods liable for confiscation under s. 111(m) and 111(o) of the Customs Act, 1962."
14 C/85603/2017 4.4 In our view with the introduction of scheme self assessment the principles of ascertaining the mis declaration as laid down by the Apex Court, in various judicial pronouncements listed below have undergone change.
Northern Plastics Ltd [1998 (101) ELT 549 (SC)] "22. As the goods imported by the appellant were being used and intended to be used as Cinematographic Film, the appellant had described them as Cinematographic Films covered by sub-heading 3702.20. No attempt was made by the customs authorities either before the Collector or before CEGAT to show that the goods imported by the appellant were ordinarily not used as Cinematographic Films or were not intended by the appellant for such a use. Moreover, looking to the Heading 3702 and its sub-heading, it does not appear that such goods were intended to be covered by sub-heading 3702.90. As regards the claim for exemption in payment of countervailing duty the appellant had stated that it was entitled to the benefit under Notification No. 50/88-C.E. The declaration made by the appellant has been found to be wrong by the Collector and CEGAT on the ground that there was a separate exemption notification in respect of jumbo rolls for Cinematographic Films. While dealing with such a claim in respect of payment of customs duty we have already observed that the declaration was in the nature of a claim made on the basis of the belief entertained by the appellant and therefore, cannot be said to be a misdeclaration as contemplated by Section 111(m) of the Customs Act. As the appellant had given full and correct particulars as regards the nature and size of the goods, it is difficult to believe that it had referred to the wrong exemption notification with any dishonest intention of evading proper payment of countervailing duty."
15 C/85603/2017 5.5 When Commissioner has himself in the para 33 of his order for holding the classification under the heading 392410, referred to description made in the Bill of Entries/ invoices he cannot be justified in holding the charge of misdeclaration against appellants. For that reason we are of the view that by giving the correct description on the documents relating to import clearance appellants have discharge the burden of making correct declaration on the Bill of Entry. Hence any error in classification or the exemption claimed on Bill of Entry cannot be misdeclaration with the intention to evade payment of duty for the purpose of invoking extended period of limitation. Hence demand made by invoking extended period of limitation needs to be set aside.
5.5 Since we have upheld that the benefit of exemption under Notification No 46/2011-Cus was not admissible to the appellant and demand could not have been made by invoking the extended period of limitation as provided for by Section 28(4), the demand which falls within the normal period of limitation needs to be upheld. Hon'ble Supreme Court has in case of Jain Shudh Vanaspati [1996 (86) ELT 460 (SC)] interpreting the relevant date under Section 28 as it existed then held as follows:
"4. The High Court based its judgment on material produced by the respondents before it to show that modern marketing practice required the movement of refined oil only in stainless steel or epoxy-coated tanks. It found that the material acceptable, particularly because one of the letters that the respondents produced had been written by the State Trading Corporation. The High Court held that the stainless steel containers that were used by the 1st respondents to import the said oil could not be treated as separate or independent items of importation. What had been imported was only the said oil and not the stainless steel containers. The High Court looked to the law and stressed Section 47, whereunder clearance for home 16 C/85603/2017 consumption had been given. It took the view that no show cause notices under Section 28 or Section 124 could have been issued unless and until the order under Section 47 had been revised under the provisions of Section 130.
Section 47 reads thus :-
"47. Clearance of goods for home consumption. - Where the proper officer is satisfied that any goods entered for home consumption are not prohibited goods and the importer has paid the import duty, if any, assessed thereon and any charges payable under this Act in respect of the same, the proper officer may make an order permitting clearance of the goods for home consumption."
Section 28 reads thus :-
"S. 28 - Notice for payment of duties not levied, short levied or erroneously refunded. - (1) When any duty has not been levied or has been short levied or erroneously refunded, the proper officer may, within six months from the relevant date, serve notice on the person chargeable with the duty which has not been levied or which has been so short levied or to whom the refund has erroneously been made, requiring him to show cause why he should not pay the amount specified in the notice :
Provided that where any duty has not been levied or has been short levied or has been erroneously refunded by reason of collusion or any wilful mis-statement or suppression of facts by the importer or the exporter or the agent or employee of the importer or exporter, the provisions of this sub-section shall have effect as if for the words "six months" the words "five years" were substituted.
(2) The Assistant Collector of Customs after considering the representation, if any, made by the person on whom notice is served under sub-section (1) shall determine the amount of duty due from such person (not being in excess 17 C/85603/2017 of the amount specified in the notice) and thereupon such person shall pay the amount so determined.
(3) For the purposes of sub-section (1), the expression "relevant date" means -
(a) in a case where duty is not levied, the date on which the proper officer makes an order for the clearance of the goods;
(b) in a case where duty is provisionally assessed under Section 18, the date of adjustment of duty after the final assessment thereof;
(c) in a case where duty has been erroneously refunded, the date of refund;
(d) in any other case, the date of payment of duty."
5. It is patent that a show cause notice under the provisions of Section 28 for payment of Customs duties not levied or short-levied or erroneously refunded can be issued only subsequent to the clearance under Section 47 of the concerned goods. Further, Section 28 provides time limits for the issuance of the show cause notice thereunder commencing from the "relevant date"; "relevant date" is defined by sub-section (3) of Section 28 for the purpose of Section 28 to be the date on which the order for clearance of the goods has been made in a case where duty has not been levied; which is to say that the date upon which the permissible period begins to run is the date of the order under Section
47. The High Court was, therefore, in error in coming to the conclusion that no show cause notice under Section 28 could have been issued until and unless the order under Section 47 had been first revised under Section 130."
Since there is no material change in the scheme of section 28 in respect of definition of "relevant date", even after the amendments made to that section, we are of the view that demand for normal period needs to worked out after 18 C/85603/2017 determining the "date of order of clearance under Section 47" or the "date of adjustment of duty after final assessment in case of provisional assessment made under Section 28". Since this exercise has not been done by the Commissioner while passing the impugned order the matter needs to be remanded back to him for determining and quantifying the differential duty that could have been demanded and recovered from the appellants.
4.7 Only after determining the duty demandable and recoverable within the normal period of limitation, demand of interest under Section 28AA can be made or quantified. While setting aside the demand of interest made under Section 28AA, we make it clear that the interest will be payable in terms of Section 28AAon the redetermined demand.
4.8 Section 111(m) and 111(o) of the Customs Act, 1962 which have been invoked by the Commissioner for holding that the goods are liable for confiscation read as follows:
(m) any goods which do not correspond in respect of value or in any other particular with the entry made under this Act or in the case of baggage with the declaration made under section 77 in respect thereof, or in the case of goods under transhipment, with the declaration for transhipment referred to in the proviso to sub-section (1) of section 54;
(o) any goods exempted, subject to any condition, from duty or any prohibition in respect of the import thereof under this Act or any other law for the time being in force, in respect of which the condition is not observed unless the non-observance of the condition was sanctioned by the proper officer;
4.9 From plain reading of the said clauses of Section 111, we do not find that these sub clauses, are applicable to cases where the classification of claim of exemption is found to be erroneous. The fact that the goods correspond 19 C/85603/2017 to declaration in respect of the description and value is sufficient to take the imported goods away from the application of these two clauses. Hence the order holding goods liable for confiscation and imposition of penalty under Section 112(a) cannot be sustained.
4.10 Since we have held that appellant had made any misdeclaration with intent to evade payment of duty, we are setting aside the penalty imposed under Section 114A of Customs Act, 1962in view of the Hon'ble Apex Court decision in case of Rajasthan Spinning and Weaving Mills Ltd. {2009 (238) ELT 3 (SC)] wherein following has been held-
"23. The decision in Dharamendra Textile must, therefore, be understood to mean that though the application of Section 11AC would depend upon the existence or otherwise of the conditions expressly stated in the section, once the section is applicable in a case the concerned authority would have no discretion in quantifying the amount and penalty must be imposed equal to the duty determined under sub-section (2) of Section 11A. That is what Dharamendra Textile decides."
4.11 Since Commissioner has considered the request for cross examination and has rejected the same after giving grounds for rejection we do not find any merits in bald assertion made by the appellants relying on the decision of the Hon'ble Apex Court in case of Andaman Timber Industries. It is settled law that cross examination of the every person making a statement before Customs Officer is right of the appellant. It is for the adjudicating authority to consider the request and if he finds that necessary for his determination of the facts and issues before him he can allow the cross examination or disallow after giving reasons. Commissioner has recorded sufficient reasons for disallowing cross examination requested by the appellant. Without challenging the reasons recorded Appellant cannot claim that natural justice has been violated.
20 C/85603/2017 5.1. In view of discussions as above we set aside the impugned order and remand the matter back to Commissioner for redetermination and re-quantification of the demand which can be made by denying the exemption under Notification No 46/201-Cus to the appellants within the normal period as provided by Section 28(1). Thus the appeal filed by the appellant is allowed and matter remanded to Commissioner.
(Order pronounced in the open court on 10.10.2019) (S.K. Mohanty) Member (Judicial) (Sanjiv Srivastava) Member (Technical) tvu