Custom, Excise & Service Tax Tribunal
M/S. Page Industries Limited vs Commissioner Of Customs, Chennai on 10 June, 2015
IN THE CUSTOMS, EXCISE & SERVICE TAX
APPELLATE TRIBUNAL
SOUTH ZONAL BENCH, CHENNAI
C/EH/40423 to 40425/2015 and C/Misc./40426 to 40428/2015 and
C/41063 to 41065/2015
(Arising out of Order-in-Appeal No.397 to 399/2015 dated 31.3.2015 passed by the Commissioner of Customs (Appeals), Chennai)
M/s. Page Industries Limited Appellant
Vs.
Commissioner of Customs, Chennai Respondent
Appearance Mrs. Rukmani Menon, Advocate for the Appellant Shri B. Balamurugan, AC (AR) for the Respondent CORAM Honble Shri R. Periasami, Technical Member Honble Shri P. K. Choudhary, Judicial Member Date of Hearing / Decision: 10.06.2015 Final Order No. 40623-40625 / 2015 Per R. Periasami Appellants have filed miscellaneous applications for early hearing of the appeal as well as for stay of operation of the impugned order.
2. After hearing both sides we find that the Bills of Entry are live consignment and involves on classification dispute ad considering the necessitating nature early hearing application is allowed. After dispensing with the stay application, we proceed to dispose of the main appeal itself at this stage.
3. The brief facts of the case are that the appellants imported Hook and Eye and three Bills of Entry Nos. 6382741 and 6381744 both dated 8.8.2014 and 6468065 dated 18.8.2014 self-assessed the goods under Chapter 8308 1010 BCD @10%. These bills of entry were scrutinized on 11.8.2014, 12.8.2014 and 22.8.2014 and customs duty was paid on that date. After the examination of goods under second check the said Bills of Entry were returned to the concerned Group for re-assessment. The apprising group re-assessed these Bills of Entry and classified the goods under CTH 62129090 as the goods were found into Tape and allowed the duty @ 10% or Rs.30/- per piece whichever is higher. Appellants preferred appeal before the Commissioner (Appeals) against the Order-in-Original. The Commissioner (Appeals) in the impugned order upheld the classification under CH 62129090 and also directed the adjudicating authority to initiate proceedings for suppression as well as for the past clearances.
4. Learned counsel for the appellants submits that they are importing the said goods regularly for the last 10 years under Chapter 83081010 and the customs accepted the classification and no dispute. The Hooks and Eyes are used in the manufacture of ladies undergarments i.e. braziers. The present three bills of entry were duly self-assessed under 83081010 and duty paid and after examination of goods the Bills of Entry were returned to assessing group for re-assessment. On re-assessment the goods were re-classified under 62129090 as parts of braziers and no reasons were given for change of classification nor any speaking order passed by the assessing officer. In their Grounds of Appeal before the Commissioner (Appeals), they contested the classification and also pleaded that lower authority has not given any speaking order and no hearing was given to them before changing the classification. She submits that the lower appellate authority in the impugned order took a new stand based on the websites of junglee.com, snapdeal.com, amazon.in and had come to a conclusion that items are not hook and eye as allowed by adjudicating authority but these are known as bra extenders. This fact was not informed to them nor was any opportunity given to argue before the appellate authority. The goods imported are only hook and eye and it is not bra extender and they have strong evidence to prove that it is not used as bra extender but only used as hook and eye individually cut and used and never been used as bra extender. She also produced samples of hook and eye before the Bench. Since principles of natural justice not followed by the original authority and the lower appellate authority she prayed for remanding the case to the original authority and also prayed for clearances of the goods on which admitted duty already paid.
5. On the other hand, the learned AR for Revenue submits that the goods were re-assessed based on the examination report. The samples were drawn by the customs and sent to the Textile Committee for test and the Textile Committee report confirmed the description as 100% polyamide knitted parts of brassieres (loop tape) and the goods were re-assessed on merits and classified under 62129090. He submits that hooks and eyes are also sold separately in the market.
6. After hearing both sides prima facie we find that the Bills of Entry were accepted by the apprising group under Chapter 83081010 only at the time of examination the Bills of Entry were returned back to the assessing group for re-assessment. It goes without saying that in this case it is the appellant who self assessed the Bill of Entry and classified the goods under Chapter 8308 1010 but the Department disputed the classification. It is mandatory on the part of the adjudicating authority to follow the natural justice and inform the appellant as to why the classification under Chapter 83081010 is not acceptable and the reasons for classifying under Chapter 6262. We also find that the appellants clearing the said goods for the last several years in the past and classification under Chapter 83081010 was accepted by the customs. Further, we find that the lower appellate authority in his order at page 10 and 11 also recorded in his finding these facts as under:-
Non-issue of speaking order ratifying the assessment Once reassessment is done contrary to the self assessment of the importer, the Group is bound to issue a speaking order under section 17(5) of the Customs Act, 1962. But in this case speaking order is not issued by the group. The LAA has forwarded cross-objections justifying the classification. It is made clear that issuance of cross objection cannot take the place of the finding of an order in original. In these factual circumstances, I proceed to decide the case on merits. From the above it is clear that the appellate authority clearly held that Group has not issued a speaking order but he chose to decide the classification on merits. In the impugned order, he has described the product as Bra Extenders based on products available in various websites which was reproduced in para 12 and 13 of the Order-in-Appeal.
7. We find that when the lower appellate authority chooses to change the description altogether to a new product other than what was re-assessed by the original authority but failed to give an opportunity to the appellants to put forth their defence. Further, we find at page 18 of the Order-in-Appeal that Commissioner (Appeals) has not only decided the classification to a new product as Bra Extender instead of Hooks & Eyes and also directed the lower authority to initiate proceedings for mis-declaration/suppression and also to examine the past clearances. When the Department chooses to rely on certain evidence whether it is Textile Committee report, literature or any records it is mandatory that appellant shall be given an reasonable opportunity to defend their case. We also find that the appellants have filed appeals before lower appellate authority disputing the classification followed by the Department and the lower appellate authority has gone beyond the grounds of appeal and described the product entirely to a new description as Bra Extenders and also directed the original authority for initiate proceedings against the appellant.
8. As rightly contended by the appellants, we hold that the original authority and the lower appellate authority not followed the principles of natural justice, and it is a fit case to be remitted back to Department, the impugned order is liable to be set aside for deciding the classification issue afresh after providing a reasonable opportunity of hearing to the appellants. Appellants are directed to produce all necessary evidences before the original authority and he shall pass a speaking order on merits within a period of three months and all issues are open to both sides. We also find that the appellants had already paid the admitted customs duty on the goods, we direct the customs to allow clearance of goods covered under said 3 Bills of Entry with necessary bond and security in the form of bank guarantee of 25% of the differential duty.
9. Accordingly, the impugned order is set aside and the appeals are allowed by way of remand to the adjudicating authority in the above terms.
(Dictated and pronounced in open court)
(P.K. CHOUDHARY) (R. PERIASAMI)
Judicial Member Tehnical Member
Rex
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