The Delhi Bench of Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has upheld the confiscation by the customs department on the ground imported goods not capital goods imported under Export Promotion Capital Goods (EPCG) Scheme.
The bench of Rachna Gupta (Judicial Member) and Hemambika R. Priya (Technical Member) has observed that the goods were self-declared and self-assessed by the respondent as ‘Single Jersey Circular Knitting Machine’ on which 18% IGST is applicable. The respondent on the contrary had paid only 5% IGST which was applicable in case the imported goods had those would have been Atta chakki.
M/s Pratibha Syntex Ltd., the respondent/assessee was listed for Premise BasedAudit vide DGARM letter no. 229/2018RMCC/5665 dated 1.2.2019. Accordingly, the appellant was required to provide details of import and export from all ports for the period w.e.f. 1.4.2015 to September 2019.
From the documents received, the respondent was observed to have filed a Bill of Entry dated 7.9.2017 for import of goods declared as ‘Single Jersery Circular Knitting Machine, Model MV 4-3.2(ii)’ with declared assessable value of Rs. 8134035/- classifying them under CTH 84471219 of Customs Tarrif Act, 1975.
The respondent declared 12% IGST taking benefit of entry at serial no. 230 of schedule-I of IGST notification no. 01 dated 28.06.2017. The department formed an opinion that the goods imported were knitting machines which are classifiable under serial no. 339 of schedule-III of the revised IGST notification no. 41/2017 dated 14.11.2017 according to which the 18% IGST rate and that the CTH 84471219 covers Air Based Atta Chakki/Pawan Chakki, which admittedly is not the imported goods.
Based on this opinion the respondent was alleged to have short paid the duty amounting to Rs. 10,57,425. The amount of duty was proposed to be recovered vide the show cause notice no. 440/2020-21 dated 21.09.2020. It was proposed that the correct IGST leviable on the goods is @18% and benefit under serial 230 of IGST notification no. 01 dated 28.06.2017 was erroneously claimed. The act was alleged to be an act of suppression of material facts, resultantly the goods were proposed to be liable to confiscation in terms of section 111 (m) of the Custom Acts 1962.
Penalty was also proposed to be imposed upon the appellant under section 112 (a) / 114 A and / or section 117 of Customs Act 1962. The said proposal was confirmed by the original adjudicating authority.
The appeal against the order, as was filed by the assessee has been allowed in their favour the vide the impugned order in appeal.
The tribunal while allowing the department’s appeal held that the imported goods are rightly held liable for confiscation under section 111 (m) of Custom Act 1962. The goods, however, were not available for confiscation. Hence, the original order of not imposing any redemption fine on the respondent-importer is also justified.
Case Details
Case Title: Commissioner of Customs, Indore Versus M/s. Pratibha Syntex Ltd.
Case No.: Customs Appeal No. 52312 of 2022 With Customs Cross Application No. 50303 of 2023
Date: 17.01.2025
Counsel For Appellant: Girijesh Kumar
Counsel For Respondent: None