Custom, Excise & Service Tax Tribunal
Spml Infra Limited vs Principal Commissioner, Customs ... on 2 May, 2025
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL
NEW DELHI
PRINCIPAL BENCH - COURT NO. - IV
Customs Appeal No. 50851 of 2021
[Arising out of Order-in-Original No. 01/2021/MKS/Pr. Commissioner./ICD-
Import/TKD dated08.01.2021 passed by the Principal Commissioner of Customs
(Import), New Delhi]
M/s. SPML Infra Limited ...Appellant
F-27/2, Okhla Industrial Area,
Phase-II, New Delhi - 110020
VERSUS
Principal Commissioner of Customs
(Import) - New Delhi (ICD TKD) ...Respondent
Inland Container Depot,
Tughlakabad, New Delhi - 110020
WITH
Customs Appeal No. 50852 of 2021
[Arising out of Order-in-Original No. 01/2021/MKS/Pr. Commissioner./ICD-
Import/TKD dated 08.01.2021 passed by the Principal Commissioner of Customs
(Import), New Delhi]
Shri Sushil Sethi ...Appellant
Managing Director, SPML Infra Ltd.,
F-27/2, Okhla Industrial Area,
Phase-II, New Delhi - 110020
VERSUS
Principal Commissioner of Customs
(Import) - New Delhi (ICD TKD) ...Respondent
Inland Container Depot,
Tughlakabad, New Delhi - 110020
APPEARANCE:
Shri Bhaskar Thakkar, Chartered Accountant for the Appellant
Shri S.K. Rahman, Authorized Representative for the Respondent
CORAM:
HON'BLE DR. RACHNA GUPTA, MEMBER (JUDICIAL)
HON'BLE MR. P.V. SUBBA RAO, MEMBER (TECHNICAL)
DATE OF HEARING: 19.12.2024
DATE OF DECISION: 02.05.2025
FINAL ORDER No. 50584-50585/2025
DR. RACHNA GUPTA
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This order disposes of two appeals arising out of common
order in original bearing no. 01/2021 dated 08.1.20211 passed by
the Principal Commissioner of Customs, Inland Container
Depot2Tughlakabad deciding the proposals made in the Show Cause
Notice dated 12.3.2020 3 issued by the Directorate General of
Revenue Intelligence4 which was made answerable to the Principal
Commissioner of Customs, Tughlakabad, Joint Commissioner of
Customs, Air cargo complex Delhi and Assistant Commissioner of
Customs, Nhava Sheva in respect of goods imported through the
respective ports/air cargo complexes. The Central Board of Indirect
Taxes and Customs appointed the Principal Commissioner as the
common adjudicating authority to decide the proposals in the SCN
and accordingly, he passed the impugned order.
1.1 Appeal no. 50851 of 2021 is filed by M/s. SMPL Infra
Ltd. 5 , the company / importer challenging the change of
classification of the imported goods, demand of differential customs
duty under section 28(4) of the Customs Act, 1962 6 invoking
extended period of limitation, confiscating the imported goods/
holding the imported goods liable for confiscation under section
111(m) of the Act on the allegation of wrong classification and
imposing penalties under section 114A and 114AA of the Act.
Appeal no. 50852 of 2021 is filed by Shri Sushil Sethi,
Managing Director of M/s. SMPL Infra Ltd.to challenge the
order of imposition of penalties upon him under section 112(a) (ii),
1 Impugned order
2 ICD
3 SCN
4 DRI
5 Importer
6 Act
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114AA and 117 of the Act.The facts whichculminated into the
impugnedorder are as follows: -
1.2 M/s SPML Infra Ltd. is engaged in execution of water supply
projects. For this purpose, it imported AMR/Non-AMR (automated
meter reading apparatus) water meters from M/s Arad Technologies
Ltd., Israel and China throughICD Tughlakabad, Air Cargo Complex,
New Delhi and JNCH Nhava Sheva Port. DRI received intelligence
that the importer had imported domestic water supply meters for
volumetric measurement and revenue billing but wrongly classified
them under Customs Tariff Item790261010with a view to evade
duty. The details of the bills of entry filed at the three ports are as
follows: -
ICD Tughlakabad
BOE BOE date Country of CTH QTY
Number origin
8533350 09.03.2015 CN 90261010 9000
9642507 22.06.2015 CN 90261010 11000
4602709 16.03.2016 CN 90261010 3200
4809105 06.04.2016 CN 90261010 10000
5227966 11.05.2016 CN 90261010 6800
Air Cargo Complex, New Delhi
BOE BOE date Country of CTH QTY
Number origin
9279660 19.05.2015 CN 90261010 6000
8635614 18.03.2015 CN 90261010 4000
2138408 04.08.2015 IL 90261010 1
2138408 04.08.2015 IL 90261010 1
2138408 04.08.2015 IL 90261010 1
Nhava Sheva Port
BOE BOE date Country of CTH QTY
Number origin
6284178 08.08.2016 IL 90261010 46
6284178 08.08.2016 IL 90261010 16
6284178 08.08.2016 IL 90261010 5
7
CTI
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6284178 08.08.2016 IL 90261010 9
6284178 08.08.2016 IL 90261010 1
6284178 08.08.2016 IL 90261010 7
1.3 Based on the said intelligence searches were conducted at the
business as well as the residential addresses of the appellants.
Certain documents were recovered under Panchnamas including a
copy of the contract / agreement dated 27.05.2013 executed
between the appellant company and Delhi Jal Board (DJB). This
contract / agreement was for the supply, installation and
maintenance of AMR / Non-AMR (automatic meter reading /non-
automaticmeter reading) water meters of size 15mm. The
document also contained the specifications which the water meters
had to meet asIS:779:1994 OR ISO:4064:1993. The matter was
investigated further, statements were recorded and DRI formed an
opinion that the water meters of such specifications are multi jet
water meter for measurement of domestic consumption of water
and that they were correctly classifiable under CTI 90282000 and
that the importer had misclassified them under CTI 90261010
with an intent to evade duty.
1.4 Shri Deepak Jain,General Manager (Projects) of SMPL, in his
statement dated 31.01.2020 made under section 108 of the Act
admitted that they imported water meters meant for measuring the
domestic consumption of water, which are classifiable under
CTI90282000.
1.5 Investigations revealed that the importer had previously
(during 2012) imported the same goods, i.e. AMR water meters as
samples for testingfrom the same foreign supplier, M/s Arad
Technologies Ltd.classifying them under CTI 90282000. Those
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consignments were cleared through their Customs Broker M/s.
Shailendra Jain C&F Pvt. Ltd., New Delhi.
1.6. Thereafter, the importer changed its Customs Broker to M/s.
P.S. Bedi &Co. Pvt. Ltd., New Delhi through whom it cleared the
goods imported through the disputed Bills of Entry by classifying
them under CTI 9026 1010. Shri Deepak Kumar Jain admitted in
his statement that the goods imported through the disputed Bills of
Entry and the goods which they had previously imported were
identical.
1.7 The invoices issued by the supplier M/s. Arad Technologies
Ltd. indicated four-digit HSN code of 9026 but the Certificates of
Country of Origin issued by the authorities in exporting country
clearly indicated HSN code 9028. Further investigation showed that
the invoices issued for the past consignments by the same supplier
indicated HSN code 9028.
1.8. Statement of Shri Rajesh Kumar Singhal, G-Card holder of
the previous Customs Broker M/s. Shailendra Jain C&F was
recorded on 4.2.2020 who confirmed that they had cleared the past
consignments of the importer classifying the meters under CTI
9028 2000 and that the import documents including the invoice of
the supplier showed HSN code 9028.
1.9. Statement of Shri Satendra Singh Chauhan, authorized
signatory of the new Customs Broker M/s. P S Bedi was recorded
who stated that the importer contacted them to clear the water
meters imported by them. He also said that the importer had given
written instructions that they should be classified under CTI 9026
1010and that they filed the Bills of Entry accordingly.
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1.10. In short, the imported goods were classified under HSN 9028
in the past invoices. They were also classified accordingly in the
Bills of Entry and the goods were cleared. Thereafter, the appellant
changed its Customs Broker and directed them in writing to file Bills
of Entry under CTI 9026 1010. The invoices from the overseas
supplier also changed the HSN and indicated 9026 (as opposed to
9028 indicated in the past invoices). However, the Country of
Origin certificates issued by the authorities of the exporting country
mentioned the HSN 9028. It is also an admitted fact that there
was no difference between the goods imported in the past and the
goods imported through the disputed Bills of Entry.
1.11 Considering all the above, the department formed an opinion
that there has been a deliberate attempt on part of the appellants
to mis-declare the imported item i.e. water meters falling under
CTI 90282000 as flow meters falling under CTI 90261010 with
the intention to wrongly avail exemption from the whole duty of
custom leviable thereon, under notification no. 24/2005-Cus dated
01.03.2005 thus have evaded custom duty causing loss to the
government exchequer.
1.12 Accordingly, Show Cause Notice bearing no. 856/2020/851-
53 dated 12.03.2020 was served upon M/s SPML Infra Ltd., the
importer, Sh. Sushil Sethi, the Managing Director of M/s SPML Infra
Ltd. and on M/s PS Bedi & Company Pvt. Ltd., the customs broker
of the appellants. It was proposed to reassess duty classifying the
imported goods under CTI 90282000 instead of CTI 90261010.
The goods were also proposed to be confiscated due to mis-
declaration and the differential customs duty was proposed to be
recovered under section 28 of the Act invoking extended period of
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limitation along with the interest under section 28AA of the
Act.Penalties were proposed to be imposed on the importer
company under section 114A, 114AA of the Act. Penalty was
proposed to be imposed on Shri Sushil Sethi was proposed under
Sections 112, 114AA and 117 of the Act. Penalty against custom
broker was also proposed under section 112 and section 114AA of
Custom Act 1962. The proposals in the SCN were confirmed by the
impugned order dated 08.01.2021. We have before us, only
appeals of M/s. SMPL Infra Ltd and of Shri Sushil Sethi. There is no
appeal by the Customs Broker M/s. P.S. Bedi & Co.
2. We have heard Shri Bhaskar Thakkar, learned Chartered
Accountant representing the appellants and Sh. SK Rahman,
learned authorized representative of the department and perused
the records.
Submissions on behalf of the appellants
3. Learned Chartered Accountant appearing on behalf of the
appellants submitted as follows:
3.1 The Appellant importer had purchased and imported water
meters under various Bills of Entry imported during the period FY
2015-16 for execution of contract awarded by the Delhi Jal Board.
As per the said contract/agreement the supply of water meters
confirming to IS 779:1994 or ISO 4064:1993. ISO 4064:1993
which deals with measurement of water flow in fully charged cold
conduit were to be supplied. Some of the important definitions as
referred in the International Organisation for Standardization (ISO)
were referred impress upon that flow rate (Q) - Quotient of the
actual volume of water passing through the water meter and the
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time taken for this volume to pass through the water meter. The
catalogue/brochure of Model Q water meter given by M/s. Arad
Technologies Limited, overseas supplier in the impugned case
clearly specifies values of Q3, Q2/Q1, Q2/Q1. As per HSN
explanatory note flow meter which measures rate of flow are
covered under CTH 90261010 and liquid meters such as household
supply meters, which measures total volume of liquid delivered over
a period are covered under CTH 9028 2000. Appellant, product fall
under 1st category hence the imported goods are rightly classified
under CTH 90261010.
3.2 In a similar matter involving classification dispute, the Hon'ble
CESTAT, Kolkata recently held that imported water meters having
specification to ISO 4064:1993 and product specification as
expressed in the overseas supplier catalogue, should be classified
under CTI90261010.
3.3 Since the year 2000, all importersare required to self- assess
duty and self-assessment is also an order of assessment. Thus,
without challenging the final assessment order through an appeal
under Section 128 of the Act the department issued the SCN which
is bad in law.Reliance is placed on ITC Ltd. Vs. Commissioner of
Central Excise, Kolkata-IV 2019 (368) ELT 216 (SC)where at
Para 43 is observed as follows:
"As the order of self-assessment is nonetheless an
assessment order passed under the Act, obviously it would be
appealable by any person aggrieved thereby. The expression
'Any person' is of wider amplitude. The revenue, as well as
assessee, can also prefer an appeal aggrieved by an order of
assessment. It is not only the order of re-assessment which is
appealable but the provisions of Section 128 make appealable
any decision or order under the Act including that of self-
assessment"
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3.4 The disputed bills of entry were filed in the FY-2015-16 and
the SCN has been issued on 12.03.2020 invoking extended period
on the ground of suppression of facts. The question arises that
when the Bills of entry were finally assessed from three different
location i.e. ICD Tughlakabad, Air Cargo Complex, New Delhi,
Nhava Sheva Port. Thus, three different officers having rank of
Assistant Commissioner or above have dealt with such classification
issue and accepted the same, then just because DRI have different
interpretation it does not tantamount to "Suppression" Reliance is
placed on Incredible unique Buildcon Pvt. Ltd. versus
Commissioner of C. Ex. & S.T., Alwar 2022 (65) G.S.T.L. 377
(Tri. - Del.).
3.5The impugned order may be set aside and both the appeals may
be allowed.
Submissions of Revenue
4. Rebutting these submissions, Ld. Authorised Representative
(AR) for the department submitted as follows.
4.1The appellant imported disputed goods by declaring them as
"AMR or non-AMR water flow meters" at various ports namely ICD
Tughlakabad, ACC Delhi &Nhava Sheva Port. The appellant has
declared CTI90261010 and claimed benefit of notification S.No. 31
of notification No. 24/2005-Cus dated 01.03.2005 as amended and
8
paid basic customs duty of 0%. The correct CTI is
90282000chargeable to BCD of 7.5%.
4.12 The heading CTH9026 covers flow meters, which measure
the rate of flow. The HSN Explanatory notes given for 9026 says
8 BCD
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that the heading excludes apparatus which merely indicate the total
amount of liquid delivered during the period, which are
classifiableas 'supply meters' in heading 9028. Thus, it is very clear
that the water meters installed at homes which measure the
quantum of water consumed over a period, say in a month, are to
be classified under CTI 90282000.
4.3 The appellant had entered into a contract dated 27.05.2013
with Delhi Jal Board for supply, installation and maintenance of AMR
non-AMR water meters. The imported goods were supplied to the
Delhi Jal Board as per this contract. One of the clauses of this
contractclarifies that these meters were "application is for domestic
consumption".
4.4 The catalogue with the said contract produced shows the
model as "domestic model Q, multi jet magnetic water meter' and
its application as 'for domestic consumption'. The words'flow meter'
arenowherementioned in the contract.Thus, it is clear that under
the contract, theappellant agreed to supply water meters and not
flow meters and for this purpose it imported the meters. Reliance
is placed on the decision in the case of Liquid Controls India Pvt.
Ltd. Versus Commissioner of Cus., Acc, Mumbai reported as
2017 (356) E.L.T. 278 (Tri. - Mumbai).
4.5 Shri Deepak Kumar Jain General Manager Projects of the
appellant admitted that the imported goods are domestic water
meters required for revenue billing. The description in the contract
is also water meter of make ARAD, which are multi jet magnetic
water meter.
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4.6 The importer had earlier imported samples during the year
2012 and CTH was declared as 9028 in Bills of Entry and the
invoices of the supplier also mentioned HSN CTH 9028. Thereafter,
when bulk quantities were imported in year 2015 and 2016 the
appellant changed the CTH from 9028 to 9026 and the invoices of
the overseas supplier also changed accordingly.The Certificates of
origin issued by the authorities of the exporting country still
indicate HSN 9028.
4.7 Shri Rupendra Singh Bedi, Director of PS Bedi & Co., the
Customs broker, in his statement dated 02.03.2020, said that he
had seen the contract agreement for supply and installation and
maintenance of water meters between appellant-importer and Delhi
Jal Board and the word "flow meter" was not mentioned in the said
contract.
4.8 The CTH 9028 talks of 'liquid meters'. Water is a liquid.
Hence, 9028 heading is appropriate for water meters. Reliance is
placed on the case law of the case of Dunlop India Ltd. & Madras
Rubber Factory Ltd. Versus Union of India and Others
reported as 1983 (13) E.L.T. 1566 (S.C.)
4.9 Goods must be classified as understood by the people in trade
and commerce in the usual course. In the instant case, the
imported goods are used to measure volume of water flowing. It is
immaterial even if they can, in addition, also measure the rate of
flow. Hence, the imported goods were correctly classifiable under
CTI 9028 2000 and there is no infirmity in the impugned order
which may be upheld and the appeals may be dismissed.
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5. We heard the submissions advanced by both sides and
perused the records. The issues to be decided in this appeal are:
(i) Which is the correct classification of the disputed goods- CTI
9026 1010 (as claimed by the appellants) or CTI 9028
2000 (as held in the impugned order)?
(ii) If the classification in the impugned order is correct, has the
demand been correctly raised invoking extended period of
limitation under section 28 (4)?
(iii) Has the demand of interest under section 28AA been
correctly invoked?
(iv) Were the imported goods correctly confiscated or have
been held liable to confiscation under section 111(m)?
(v) Have the penalties under section 112, 114A,114AA and 117
been correctly imposed on the appellants herein?
Classification of the goods
5.1 We proceed to examine the classification first. The two
rivalCTIs are 9028 2000 and 9026 1010. The relevant entries
are as follows:
Chapter 90: Optical, Photographic, Cinematographic,
measuring, checking, precision, medical or surgical
instruments and apparatus; parts and accessories thereof
9026 Instruments and Apparatus for Measuring or Checking
the Flow, Level, Pressure or Other Variables of Liquids or
Gases (for Example, Flow Meters, Level Gauges,
Manometers, Heat Meters), Excluding Instruments and
Apparatus of Heading 9014, 9015, 9028 Or 9032
902610 For measuring or checking the flow or level of liquids
9026 10 10 For measuring or checking the flow or level of
liquids: Flow meters
.......
13 Customs Appeal No. 50851 of 2021 Customs Appeal No. 50852 of 2021 9028 Gas, liquid or electricity supply or production meters including calibrating meters therefor 9028 1000 Gas meters 9028 20 00 Liquid meters
6. As per the Rule 1 of the General Rules of Interpretation, goods should be classified as per the chapter headings read with the relevant chapter notes and section notes. It is evident from the description of the two entries of the Customs Tariff that CTI 9026 1010 would apply to flow meters, i.e., those which measure the rate of flow of the liquids through them while CTI 9028 2000 would apply to those meters which measure the volume of the liquid flowing through them.
7. Since the Customs Tariff is based on the Harmonised System of Nomenclature (HSN), the Explanatory Notes to HSN merit consideration in classifying goods. We draw our support from the case law of the case of Collector of Customs, Bombay Versus Business Forms Ltd. reported as 2002 (142) E.L.T. 18 (S.C.). The Hon'ble Supreme Court in another matter titled as Collector of Central Excise, Shillong Vs. Wood Craft Products Limited reported as 1995 (77) ELT 23 SC has held that the tariff entry is patterned on HSN explanatory notes which are preferable even to ISI glossary in case of Conflict. The Hon'ble Supreme Court in this case has perused the statements of objects and reasons of Central Excise Tariff Bill, 1985 which led to the enactmentof Central Excise Tariff Act, 1985 and held that the Central Excise Tariff is based on HSN, the internationally accepted nomenclature which has been taken into account in the said statement of objects and reasons so 14 Customs Appeal No. 50851 of 2021 Customs Appeal No. 50852 of 2021 as to reduce disputes on account of tariff classification. Accordingly, the Hon'ble Court held that for resolving any dispute relating to tariff classification, a safe guide is the internationally accepted nomenclature emerging from the HSN.
8. The relevant HSN notes to the two entries are as follows. CTH 9026: Instruments and apparatus for measuring or checking the flow, level, pressure or other variables of liquid or gases (for example, flowmeters, level gauges, mano-meters, heat meters), excluding instruments and apparatus of heading 90.14, 90.15, 90.28 or 90.32.
9026.10 - For measuring or checking the flow or level of liquids 9026 10 10 For measuring or checking the flow or level of liquids:
Flow meters 9026.20 - For measuring or checking pressure 9026.80 - Other instruments or apparatus 9026.90 - Parts and accessories Apart from instruments or apparatus more specifically covered by other headings of the Nomenclature, such as:
(a) Pressure reducing valves and thermostatically controlled valves (heading 84.81);
(b) Anemometers (wind gauges) and hydrological level gauges (heading 90.15);
(c) Thermometers, pyrometers, barometers, hygrometers and psychrometers (heading 90.25);
(d) Instruments and apparatus for physical or chemical analysis, etc. (heading 90.27), This heading covers instruments and apparatus for measuring or checking the flow, level, pressure, kinetic energy or other process variables of liquids or gases.
The instruments and apparatus of this heading may be fitted with recording, signaling or optical scale, reading devices or transmitters with an electrical, pneumatic or hydraulic output.
Measuring or checking apparatus generally incorporates an element sensitive to variations in the quantity to be measured (e.g. Bourdon tube, diaphragm, bellows, semiconductors) moving a 15 Customs Appeal No. 50851 of 2021 Customs Appeal No. 50852 of 2021 needle or a pointer. In some devices the variations are converted into electrical signals.
Measuring or checking instruments or apparatus of this heading combined with taps, valves, etc., are to be classified as indicated in the Explanatory Note to heading 84.81.
(I) Apparatus for Measuring or Checking the Flow or Rate of Flow of Liquids or GasesFlowmeters. These indicate the rate of flow (in volume or weight per unit of time) and are used for measurement of flow both through open channels (rivers, waterways, etc.) and through closed conduits (piping, etc.) Some flowmeters use the principle of the fluid meters of heading 90.28 (turbine- type, piston-type, etc.) but the majority are based on the principle of differential pressure.
Flowmeters which operate by using magnetic fields, ultrasound or heat.
This heading excludes:
(a) Hydrometric paddle - wheels for measuring the rate of flow in rivers, canals, etc. which fall in heading 90.15 as hydrological instruments.
(b) Apparatus which merely indicate the total amount of liquid delivered over a period, which are classified as supply meters in heading 90.28.
Anemometers of the special types used for recording the rate of flow of air currents in mines, tunnels, chimneys, furnaces and conduits in general, and consisting essentially of a bladed fan and a calibrated dial. In some devices the measured values are converted into electrical signals.
CTH 9028: Gas, liquid or electricity supply or production meters, including calibrating meters thereof 9028.10 - Gas meters 9028.20 - Liquid meters 9028.30 - Electricity meters 9028.90 - Parts and accessories These meters are generally fitted with a device driven at a speed proportional to the rate of fluid flow or to the electrical quantity being measured. They are often fitted in a bypass or shunt off the 16 Customs Appeal No. 50851 of 2021 Customs Appeal No. 50852 of 2021 main or connected to measuring transformers, so that only part of the flow passes through them, but are calibrated so as to indicate the total quantity passing through the service pipes or through the main.
Gas, liquid or electricity supply or production meters fall in this heading whether or not fitted with a clockwise recording device or with a simple mechanical or electrical device for bringing controlling, signaling, etc., appliances into action.
(I) Gas or Liquid Supply or Production Meters These meters are used to measure in volumetric units the amount of fluid passing through a pipe. Flowmeters, which measure rate of flow are excluded (heading 90.26). The heading includes household supply meters, plant production or supply meters, and standard meters (for checking the accuracy of ordinary meters). In addition to simple meters, the heading also includes special meters such as maximum, prepayment, price-calculating, etc., meters. Supply or production meters consist essentially of the measuring device (turbine, piston, diaphragm, etc.), the mechanism for regulating the admission of fluid (generally slide valves), the transmission (endless screw, camshaft, gears or other system), and a recorder or an indicator (pointer or drum type) or both.
8. We find that the HSN Explanatory note to 9028 clearly states that household water supply meters measuring volumetric units are covered under CTH 9028. HSN Explanatory note to 9026 says that the heading excludes apparatus which merely indicate the total amount of liquid delivered by the period, which is classified as 'supply meters' in heading CTH 9028.
9. Thus, both from the entries in the Customs Tariff and the corresponding explanatory notes of HSN, it is evident that meters which are primarily designed to measure the rate of flow of the liquids are classifiable under CTI 9026 1010 while those which measure the volume of flow are classifiable under CTI 9028 2000. 17
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10. The question which arises was what is the nature of the meters which were imported. The undisputed facts are that the imported meters were supplied by the importer to Delhi Jal Board under a contract to supply, install and maintain meters to be installed at homes.
11.The contract dated 27.05.2013 was executed between the appellants and Delhi Jal Board pursuant whereto the appellant has imported the impugned meters. The name of the work in the said contract is "supply of installation and seven-year maintenance of 15 mm size AMR/non-AMR water meters confirming to IS 779; 1994 or ISO 4064; 1993". The description given in the contract in addition to the above is that the water meters were required to be marked to read in metric system along with the manufactures test and guarantee certificate, including cost of all material, GI fittings including supplying at store and transporting from store to consumer connections in municipal area straight reading supply of AMR water meters. Thus, it becomes clear that the contract itself is simply talking about the requirement of meters meant for measuring the volume of water supplied to the household in the municipal area over a period of time. It is nowhere talks about the flow meters. Jal Board is otherwise not suppose to measure the speed of the water. It required meters to be installed domestically for revenue billing, it otherwise coming out of the contract itself.
12. As already observed above that water meters measuring volume per duration of time are simply water meters and the water meters measuring speed of the liquid per unit of time are the flow meters. It has also been observed that all water meters are flow meters but not vice versa.Thus, the imported goods were 18 Customs Appeal No. 50851 of 2021 Customs Appeal No. 50852 of 2021 the one to be supplied to Delhi Jal Board for measuring the volume of domestic supply of water and thus the product is water meter clearly covered under CTH 9028.
13. We have also seen the scope of ISO 4064 specification which was brought on record by the appellant itself, the international standards thereof. We observe that ISO 4064 applies to water meters based on electrical or electronic principles and to water meters which based on mechanical principles incorporating electronic devices are used to measure the actual volume flowof cold portable water and hot water. Thus, the imported goods merit classification under CTI 9028 2000.
Confirmation of demand under section 28(4) of the Act invoking extended period of limitation
14. The next question is of confirmation of demand invoking extended period of limitation. Learned Chartered Accountant made two submissions on this issue. Firstly, he submitted that the Bills of Entry were self-assessed and the goods were cleared and self- assessment is also a form of assessment as per the judgment of the Supreme Court in ITC Ltd vs Commissioner of Central Excise, Kolkata IV9 and the self-assessed Bills of Entry could have been assailed by the department before Commissioner (Appeals) under section 128 of the Act. According to the learned chartered accountant, since the demand has been raised in the SCN and confirmed in the impugned order under section 28 without first assailing the self-assessment in appeal, it is not sustainable. He placed reliance on the order of the Kolkata bench of this Tribunal in 9 2019 (368) ELT 216 (SC) 19 Customs Appeal No. 50851 of 2021 Customs Appeal No. 50852 of 2021 Shri Rajib Saha vs Commissioner of Customs (Preventive), Shillong10 in support of this submission.
15. The second submission of the learned chartered accountant is that classification is a matter of opinion of the importer according to which it self-assessed the Bill of Entry and no malafide can be attributed to it even if the classification is decided against it. Therefore, demand invoking extended period of limitation cannot be sustained.
16. Learned authorized representative for the Revenue supports the confirmation of demand invoking extended period of limitation.
17. We have considered the submissions on this question. The reliance placed by the learned Chartered Accountant on ITC Ltd. is highly misplaced as this is a case of demand under section 28 and the question before Supreme Court in ITC Ltd. was whether refund of duty under section 27 can be sanctioned if the goods werecleared on the basis of self-assessment without filing anappeal before Commissioner (Appeals) and not if a demandcould be raised under section 28. Supreme Court held that allassessments including self- assessments can be appealedagainst before the Commissioner (Appeals) and no refund canbe sanctioned unless the assessment is modified.
18. Assessments can be modified either through anappeal to the Commissioner (Appeals) under section 128 or modified undersection 28. The submission of the learned counsel, if accepted, will result in absurd consequences. If a noticeunder section 28 is issued, after considering the reply andhearing the 10 Final Order no. 76465-76466/2023 dated 24 August 2023 passed by CESTAT Kolkata in Appeals C75278 and 75279 of 2016 20 Customs Appeal No. 50851 of 2021 Customs Appeal No. 50852 of 2021 noticee, the proper officer (commissioner oradditional commissioner or joint commissioner or deputycommissioner or assistant commissioner) has to adjudicatethe matter and pass an order. If the assessment is alreadyappealed against before Commissioner (Appeals) under section 128 and is eitheraffirmed or annulled or modified, the assessment ordermerges with the order of the Commissioner (Appeals) whichmust be honoured. The question of the proper officer againissuing a notice under section 28 on the same issue after theCommissioner (Appeals) had decided the matter does notarise because the proper officer cannot sit in judgment overthe order of the Commissioner (Appeals).
19. We now consider the order of a bench of this Tribunalpassed in Rajib Saha relied upon by the learned Counsel. The relevant portion of this order isreproduced below:
7. The Appellant cited the decision of the Hon'ble SupremeCourt in the case of I.T.C. Vs. Commissioner of CentralExcise, New Delhi [2019(368) ELT 216 (SC)] wherein ithas been held that the department cannot demanddifferential duty without challenging the self-
assessmentmade by the importer. Accordingly, they contended that theimpugned order is not sustainable.
.....
10. We observe that the self-assessment of the Bills of Entry bythe importer was not challenged by the department. TheHon'ble Supreme Court in the case of ITC Ltd, has held asunder:
When we consider the overall effect of the provisionsprior to amendment and post-amendment under FinanceAct, 2011, we are of the opinion that the claim forrefund cannot be entertained unless the order ofassessment or self-assessment is modified inaccordance with law by taking recourse to theappropriate proceedings and it would not be withinthe ken of Section 27 to set aside the order of self-assessment and reassess the duty for makingrefund; and in case any person is aggrieved by anyorder which would include self-
assessment, he has to getthe order modified 21 Customs Appeal No. 50851 of 2021 Customs Appeal No. 50852 of 2021 under Section 128 or under otherrelevant provisions of the Act.
11. We observe that the ratio of the above said decisionis squarely applicable in this case. We find that theimpugned order passed demanding differential dutywithout challenging the original assessment of the Billsof entry is not sustainable.
Hence, the demand is notsustainable on this count also.
(emphasis supplied)
20. It is evident from the above text of the order thatwhile the judgment of the Supreme Court in ITC Ltd. waswith respect to sanction of refunds under section 27, in Rajib Saha, thebench had instead, applied it to the demands under section 28 and held that anotice under section 28 cannot be issued without first filing anappeal before the Commissioner (Appeals). This, being contrary to the explicit legal position and also the law laid down bythe Supreme Court in ITC Limited, is, in our opinion, per incuriam, and hencecannot be a binding precedent on us in this case.
21. Thus, there is no force in the submission of the learned Chartered Accountant that a notice demanding duty under section 28 cannot be issued without first assailing the self- assessment before Commissioner (Appeals) under section
128. It needs to be rejected and is rejected.
22. The other submission of the learned Chartered Accountant is that classification of imported goods is a matter of opinion which, even if it is wrong, cannot result in a presumption of malafide and invocation of extended period of limitation under section 28. As per section 28, a demand can be raised only within the normal period of limitation and demand for extended period of limitation can be raised only if the short payment of duty is due to
(a) collusion; or 22 Customs Appeal No. 50851 of 2021 Customs Appeal No. 50852 of 2021
(b) any wilful mis-statement; or
(c) suppression of facts
23. This submission of the appellant looks attractive on a first look but a deeper examination of the facts would show otherwise. Generally speaking,merely assessing the duty by claiming an incorrect classification of the goods in the Bill of Entry does not mean that the importer had any intention to evade payment of duty. However, the facts of a case may prove such an intention.
24. In this case, the appellant was fully aware of the nature and function of the meters which it had imported. It imported them and supplied to Delhi Jal Board to install in homes to measure the water consumption. For this purpose, it had entered into a detailed contract with Delhi Jal Board. Therefore, the appellant was fully aware that the meters which it had imported were meant to measure the volume of water consumption by individual homes based on which Delhi Jal Board charges for the water.
25. Well before these imports under the disputed Bills of Entry, the appellant had imported samples of the meters from the same supplier and cleared them through Customs Broker M/s. Shailendra Jain C&F Pvt. Ltd., New Delhi classifying them under CTI 9028 2000 which is the same CTI under which Revenue wants to classify them in this case. The invoices from the overseas supplier for these Bills of Entry also mentioned HSN 9028.
26. Thereafter, the appellant imported these meters in larger quantity for supply to Delhi Jal Board. It changed its Customs Broker to M/s. P.S. Bedi & Co. Pvt. Ltd. and changed the classification to CTI 9026 1010; this Customs Broker indicated in 23 Customs Appeal No. 50851 of 2021 Customs Appeal No. 50852 of 2021 his statement that the appellant had given written instructions to classify the meters under CTI 9026 1010. The same overseas supplier supplied these meters also, but in the invoices,HSN 9026 was now mentioned. The Country of Origin certificates issued by the authorities in the exporting country, however, clearly mentioned HSN 9028.
27. These facts show that the appellant indicating CTI 9026 1010 in the Bills of Entry was not on any honest belief but it was clearly a strategy to evade paying duty adopted by changing the classification from CTI 9028 2000 under which it was filing the Bills of Entry. It obtained invoices from the supplier indicating HSN 9026 (as opposed to HSN 9028 indicated in the previous invoices), it changed its customs broker, gave the broker written instructions to file Bills of Entry classifying them under CTI 9026 1010. The Country of Origin certificates issued by the authorities in the export countries continued to indicate HSN 9028.
28.The question which may arise is if the importer deliberately changes the classification and it results in short payment of duty if extended period of limitation could be invoked. In our considered view, given the peculiar facts of this case, where the classification of the goods was deliberately changed by the appellant importer, its intention to evade duty by mis-classifying the goods is evident. We draw support from the judgment of the Supreme Court in Commissioner of Central Excise, Ahmedabad vs Urmin Products Pvt. Ltd and others11. In that case, Revenue assailed the orders passed by the CESTAT deciding the classification of the goods in favour of the assessee respondents. After detailed 11 2023 (10) TMI 1112 - SUPREME COURT 24 Customs Appeal No. 50851 of 2021 Customs Appeal No. 50852 of 2021 examination, the Supreme Court held the classification in favour of the Revenue. On the question as to whether extended period of limitation could be invoked for issuing a demand under section 11A of the Central Excise Act, 1944, the Supreme Court found that the respondents had changed the classification of the manufactured goods consequent upon the budgetary changes in order to take ineligible benefit and under those circumstances, and held that extended period of limitation could be invoked. Relevant paragraphs of this judgment are reproduced below:
42. It is an admitted fact that till the filing of this letter, the Assessee continued to classify theproduct as 'zarda/jarda scented tobacco' falling under CET SH 2403 9930. It is for this precisereason, that the adjudicating authority has observed, and rightly so that the letter dated30.03.2006 had been cleverly drafted and it does not mention in detail the product which theywere manufacturing at that material time namely 'zarda/jarda scented tobacco'. Though theclassification in the letter shows entry CET SH 2403 9910 ('chewing tobacco'), it would depict apicture as though it is a new product. A plain reading of the letter would not indicate that theauthor of the said letter intended to reveal any details about the product that is beingmanufactured.
However, the Assessee cannot feign ignorance as to the necessity of furnishingsuch relevant details necessary for determination of payment of duty. The Assessee having beenin this industry for a long period was well aware of this statutory requirement. Upon a deeperexamination of the said letter, the suppression becomes more apparent, namely the non-mentioningof change of the name and classification of the goods which they were currentlymanufacturing and which they ought to have disclosed. It would be apposite to note the judgmentof this Court in Continental Foundation Jt. Venture v. Commissioner of Central Excise (2007) 10SCC 337 that suppression means failure to disclose full information with intent to evade paymentof duty. It has been further held:
"12. The expression "suppression" has been used in the proviso to Section 11A of the Actaccompanied by very strong words as 'fraud' or "collusion" and, therefore, has to beconstrued strictly. Mere omission to give correct information is not suppression of factsunless it was deliberate to stop the payment of duty. Suppression means failure to disclosefull information with the intent to evade payment of duty. When the facts are known to boththe parties, omission by one party to do what he might have done would not render itsuppression. When the revenue invokes the extended period of limitation Under Section11A the burden is cast upon it to prove suppression of fact. An incorrect statement cannotbe equated with a wilful misstatement. The latter implies making of an incorrect statementwith the knowledge that the statement was not correct.25
Customs Appeal No. 50851 of 2021 Customs Appeal No. 50852 of 2021
14. As far as fraud and collusion are concerned, it is evident that the intent to evade duty isbuilt into these very words. So far as misstatement or suppression of facts are concerned,they are clearly qualified by the word 'wilful', preceding the words "
misstatement orsuppression of facts" which means with intent to evade duty. The next set of words'contravention of any of the provisions of this Act or Rules' are again qualified by theimmediately following words 'with intent to evade payment of duty.' Therefore, there cannotbe suppression or misstatement of fact, which is not wilful and yet constitute a permissibleground for the purpose of the proviso to Section 11A. Misstatement of fact must be wilful."
It is this hiding of the fact and not specifying the details in their letter that led to the issuance of theshow cause notice and invocation of Section 11A and Section 11 AC of the CE Act, by theDepartment. It cannot be ignored that till filing of the letter dated 30.03.2006, the Assessee itselfwas classifying the product as 'zarda/jarda scented tobacco' falling under CET SH 2403 9930 andbeing a large-scale manufacturer and paying large sums of amount as duty, to contend that it wasunaware of the difference between these two products, or to contend that it had classified theproduct as 'zarda/jarda scented tobacco' by ignorance, is not a plausible justification on part of theAssessee. However, on the issuance of Notification No. 2 of 2006 dated 01.03.2006 under which'zarda/jarda scented tobacco' was excluded or in other words not included in the said notification,the Assessee changed the description of its product from 'zarda/jarda scented tobacco' to'chewing tobacco'. The date of communication of the letter dated 30.03.2006 by the Assesseealso acquires significance in as much as the Notification No. 2 of 2006 dated 01.03.2006 were totake effect from 01.04.2006 and just two days before the date of the said Notification No. 2 of2006 coming into effect, this communication dated 30.03.2006 has been forwarded to theDepartment by the Assessee. The intention of springing up such a letter is evident from the factthat intention was to evade payment of duty payable Under Section 4 of CE Act; despite knowingthe fact that its product was not covered under relevant notification which provides for valuationUnder Section 4A, yet the Assessee did so, only to pay duty on lower value as per Section 4A ofCE Act, by claiming the product manufactured by it as 'chewing tobacco' rather than 'zarda/jardascented tobacco' to avail benefit of MRP-based assessment which was lower than the value asprescribed Under Section 4 of the CE Act.
43. Yet another factor which cannot go unnoticed is the statement of the production manager andfactory in-charge and manager recorded at the time of the inspection of the units/factory of theAssessee, whereunder they have clearly admitted in their statement dated 21.06.2007 recordedUnder Section 14 of the CE Act, wherein they confirmed that in the E.R. 1 returns filed for themonth of April 2006 onwards, they have revised the classification of their final product from CETSH 2403 9930 to CET SH 2403 9910 and started describing their product as 'chewing tobacco'instead of 'zarda/jarda scented tobacco' and by virtue of such declaration they continued to payduty as per MRP-based assessment under the relevant Notification No. 2 of 2006 dated01.03.2006 though 'zarda/jarda scented tobacco' was not covered under MRP-based assessmentduring the period 01.03.2006 to 10.07.2006 till the tariff entry i.e., CET SH 2403 9930 beingbrought within the ambit of Section 4A of CE Act by issuance of Notification 16 of 2006 dated11.07.2006. It is for this precise 26 Customs Appeal No. 50851 of 2021 Customs Appeal No. 50852 of 2021 reason that the act of the Assessee was held to be a deliberateand accordingly wilful misstatement was alleged on part of the Assessee, with an intention toevade duty payable Under Section 4 of the CE Act, which would attract the extended period oflimitation, namely proviso to Section 11A (1) being invoked. The adjudicating authority hasexamined the issue of invoking an extended period of limitation, in the background of thecommunication dated 30.03.2006 which has been very heavily relied upon by the Assessee tostave off the allegation of misrepresentation or wilful misstatement of facts and the adjudicatingauthority opined as under:
"It can be seen that the Assessee had very cleverly drafted the letter and did not mentionany details of the product which they were manufacturing at that material time i.e., 'Jarda scented tobacco'. On reading this letter, any person could conclude that they have started anew product 'Chewing tobacco' which they have classified in 2403 9910 as it is the, correctsubheading of Chewing tobacco. On a plain reading of the letter, at the first instance, noone will be able to understand the real motive. The Assessee did not mention in the letterthat they are changing the name and classification of the goods which are currently beingmanufactured by them which they were supposed to do. Had they mentioned this fact atthat time, the issue would not have arisen at all. Intentionally, they have hidden the factsand did not elaborate in the letter. The Assessee, on the contrary preferred to show thereasons in the statement recorded Under Section 4 on 26-6- 2006 when the departmentcaught him for evading the duty. Further, the Assessee has mentioned that as per thepractice followed by their industry, they classify their product Chewing tobacco into 24039910. The classification of the goods manufactured by an Assessee is based on manyfactors including the raw material used, manufacturing process and the end use. If any ofthe deciding factors is changed then the classification may change and therefore theindustry cannot decide the classification in such type of goods. The Assessee intentionallyhid the fact that they have changed the classification of their product viz. 'Jarda scentedtobacco'. It is an establish fact that when there is no dispute on classification and theAssessee suddenly submits a very carefully drafted letter of such type, a general inferencewill be drawn that a new product has been introduced in place of earlier one. The Assessee,with intent to evade the Central Excise duty, deliberately resorted to mis-statement andwillfully suppressed the vital facts. The Assessee had changed and misclassified theproduct from 'Jarda scented tobacco' to 'Chewing tobacco' with an intention to evadepayment of duty payable Under Section 4 of the Central Excise Act, 1944, despite knowingthe fact that their product was not covered under the relevant Notification which provides forvaluation Under Section 4A. The Assessee did so to enable them to pay duty on lowervalue [as the value as per Section 4A of Central Excise Act, 1944 (MRP based assessment)was lower than the value as per Section 4 of Central Excise Act, 1944. Thus, there was adeliberate intention to evade payment of duty by the Assessee, by misclassification andwillful mis-statement of their product and due to this act, the department is entitled to invokethe extended period as provided in the proviso to Section 11A (1) of the Central Excise Act,1944 to recover the differential duty along with interest Under Section 11 AB for the largerperiod upto 5 years and has also rendered themselves liable to penalty Under Section 11AC of the Central Excise Act 1944. I, accordingly hold that the Assessee is liable to penaltyUnder Section 11AC of the Central Excise Act, 1944."
However, the tribunal has proceeded to hold that limitation would apply and show cause noticeshould not have been 27 Customs Appeal No. 50851 of 2021 Customs Appeal No. 50852 of 2021 issued beyond one year in view of the fact that the Assessee intimated theirintention to change - vide Paragraph 22 of the impugned order, without addressing the aforesaidissues which has been dealt in detail hereinabove.In other words, the tribunal by cryptic orderhas negatived the contentions of the Revenue and held that the invocation of the extended periodof limitation was not warranted. This finding, not being in consonance with the facts obtained onthe hand, we are unable to subscribe our views to the judgment of the tribunal. In that view of thematter, we are of the considered view that Question No. 1 is to be answered against the Assesseeand in favour of the Revenue and affirm the finding of the adjudicating authority and reverseand/or set aside the finding recorded by the tribunal which has been observed at the initial stageherein given that it is not only contrary to the facts but also contrary to law as noticedhereinabove. It is for these precise reasons the Adjudicating Authority was of the clear view thatthere has been a deliberate intention to avoid payment of duty by the Assessee bymisclassification and willful misstatement of its product and hence it was justified in invoking theextended period as provided in the proviso to Section 11A(1) of CE Act, 1944.
(emphasis supplied)
29. Respectfully following the ratio of the judgment of Supreme Court in Urmin Products, we hold that considering the facts of the case, the intention of the importer to evade paying duty by deliberate mis-classification of the goods is evident and therefore extended period of limitation was correctly invoked in this case.We, therefore, hold that confirmation of demand invoking extended period of limitation with interest was correct. Confiscation of imported goods under section 111(m)
30. Section 111(m) reads as follows:
Section 111. Confiscation of improperly imported goods, etc. -
The following goods brought from a place outside India shall be liable to confiscation:
(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 trans-shipment, with the declaration for trans-shipment referred to in the proviso to sub-section (1) of section 54;
31. The imported goods were classifiable under CTI 9028 2000 and they were instead classified under CTI 9026 1010 in the Bills of Entry (which is an entry made under the Act). Such incorrect classification is, 28 Customs Appeal No. 50851 of 2021 Customs Appeal No. 50852 of 2021 usually considered as a matter of opinion and goods are not held liable to confiscation for mis-classification. However, in the peculiar facts of the case, where the importer had, deliberately changed the classification of the goods and engaged a new Customs Broker and gave written instructions to classify the goods under CTI 9026 1010, we find that Section 111(m) squarely applies to the imported goods and they were liable confiscation. In the impugned order, the imported goods were correctly confiscated under section 111(m) wherever they were available. Where they were not available, the goods were held to be liable to confiscation but were not actually confiscated. We uphold these decisions in the impugned order.
Penalties under section 112, 114A,114AA and 117
32. These sections read as follows:
SECTION 112. Penalty for improper importation of goods, etc.-
Any person, -
(a) who, in relation to any goods, does or omits to do any act which act or omission would render such goods liable to confiscation under section 111, or abets the doing or omission of such an act, or
(b) who acquires possession of or is in any way concerned in carrying, removing, depositing, harbouring, keeping, concealing, selling or purchasing, or in any other manner dealing with any goods which he knows or has reason to believe are liable to confiscation under section 111, shall be liable, -
(i) in the case of goods in respect of which any prohibition is in force under this Act or any other law for the time being in force, to a penalty not exceeding the value of the goods or five thousand rupees, whichever is the greater;
(ii) in the case of dutiable goods, other than prohibited goods, subject to the provisions of section 114A, to a penalty not exceeding ten per cent. of the duty sought to be evaded or five thousand rupees, whichever is higher:
****** Section 114A. Penalty for short-levy or non-levy of duty in certain cases. -
Where the duty has not been levied or has been short-levied or the interest has not been charged or paid or has been part paid or the duty or interest has been erroneously refunded by reason of collusion or any wilful mis-statement or suppression of facts, the person who is liable to pay the duty or interest, as the case may be, as determined 29 Customs Appeal No. 50851 of 2021 Customs Appeal No. 50852 of 2021 under sub-section (8) of section 28 shall also be liable to pay a penalty equal to the duty or interest so determined:
***** Section 114AA. Penalty for use of false and incorrect material. - If a person knowingly or intentionally makes, signs or uses, or causes to be made, signed or used, any declaration, statement or document which is false or incorrect in any material particular, in the transaction of any business for the purposes of this Act, shall be liable to a penalty not exceeding five times the value of goods.
Section 117. Penalties for contravention, etc., not expressly mentioned. -
Any person who contravenes any provision of this Act or abets any such contravention or who fails to comply with any provision of this Act with which it was his duty to comply, where no express penalty is elsewhere provided for such contravention or failure, shall be liable to a penalty not exceeding four lakh rupees.
Penalty under section 112 can be imposed for acts which render the goods liable to confiscation. Since we have upheld the confiscation of the goods/holding that the goods were liable to confiscation, section 112 squarely applies. Penalty under section 114A can be imposed if the duty was not paid or short paid by reason of collusion or any wilful mis-statement or suppression of facts. These factors are the same as those required to invoke extended period of limitation under section 28. Since we have, considering the peculiar facts of this case, upheld the invocation of extended period of limitation, we also uphold the penalties imposed under section 114A.
33. Penalty under section 114AA can be imposed for knowingly or intentionally makes, signs or uses, or causes to be made, signed or used, any declaration, statement or document which is false or incorrect in any material. In this case, the appellant deliberately caused incorrect CTI to be indicated in the Bills of Entry and hired a new Customs Broker and instructed him to indicate wrong CTI in the Bills of Entry. Therefore, section 114AA squarely applies to this case. As far as penalty under section 117 is concerned, it is a 30 Customs Appeal No. 50851 of 2021 Customs Appeal No. 50852 of 2021 residual penalty imposable where there is no other provision. Since penalties were found to be imposable and were imposed under other sections, penalty imposed under section 117 cannot be sustained.
34. In the light of entire above discussion, we hold as follows:
(i) The goods imported under the disputed Bills of Entry at three of the ports were the water meters and NOT flow meters.
(ii) The correct classification of these meters is CTI 9028 2000.
(iii) The benefit of nil rate of BCD in terms of Notification No. 24/2005 dated 01.03.2005, entry at Sr. No. 31 was available only to the flow meters under CTH 9026. The rate of duty for water meters under CTH 9028 is @ of 7.5%.
(iv) The submission of the learned Chartered Accountant that unless the self-assessed Bills of Entry are assailed before Commissioner (Appeals) under section 128, no SCN demanding duty under section 28 can be issued is not correct and the reliance placed by him on ITC Ltd.is misplaced.ITC Ltd. held that refund under section 27 cannot be sanctioned unless the assessment (including self-assessment) is assailed before Commissioner (Appeals) and it does not say that demand under section 28 can be issued only after an appeal.
(v) The appellant had deliberately changed the classification of the goods from CTI 9028 2000 to CTI 9026 1010 and hired a new Customs Broker and gave him instructions accordingly in order to evade duty; therefore, extended period of limitation under section 28 was correctly invoked.31
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(vi) Considering the peculiar facts of this case, we find that the goods were correctly confiscated/held liable to confiscation under section 111(m).
(vii) All penalties except penalty under section 117 were correctly imposed and are upheld. Penalties imposed under section 117 are set aside.
35. Both appeals are partly allowed by setting aside the penalty imposed in the impugned order under section 117. The rest of the impugned order is upheld.
[Order pronounced in the open court on 02.05.2025] (DR. RACHNA GUPTA) MEMBER (JUDICIAL) (P.V. SUBBA RAO) MEMBER (TECHNICAL) HK