By TIOL News Service

MUMBAI, AUG 19, 2016: THE appellant imported mobile concrete pump placer boom pump of 120 Cu. MT capacity mounted on Volvo Chassis and claimed classification under CTH 8705 read with exemption notification No 21/2002-Cus Sr. No. 230, List No. 18 (Item No. 17).

The exemption is claimed on vehicle amounted mobile concrete pump as exclusively used for National Highway Authority of India (NHAI), JNPT Road Project for which an undertaking has also been submitted. The appellant also submitted a letter No. 11011/7/2003-GM(PC) dated 19/4/2005 issued by Member (Finance), NHAI stating that the subject equipment is required for construction of road and will facilitate timely completion and proper execution of the project. The NHAI vide above mentioned letter also recommended exemption from import duty in favour of Contractor (Importer) for import of the above equipment.

Subsequently, the appellant requested the assessing officer to classify the goods under CTH 8413 based on the end use application of the concrete pump and to clear this consignment duty free as per the declaration under condition No. 40 of Customs Notification No 21/2002-Cus dated 1/3/2002.

In support of their claim, appellant also submitted a Chartered Engineer Certificate which clarified that correct classification of the concrete pump should be HSN or BTN 84.13.40.00 based upon end use application of the Concrete Pump.

The adjudicating authority observed that the imported equipment were more specifically covered under CTH 8705,and in absence of homologation certificate the goods were imported in violation of provisions of Section 3 of the Foreign Trade (Development and Regulation) Act, 1992 r/w Section 11(2)(u) of Customs Act, 1962, hence liable for confiscation u/s 111(d) of Customs Act, 1962.

Accordingly, order for confiscation of the goods under Section 111(d) with option of redemption of the goods on payment of fine of Rs. 5 lacs and penalty of Rs.50,000/- was also imposed u/s 112 of Customs Act, 1962.

Aggrieved, the appellant is before the CESTAT.

It is submitted that if the bench takes lenient view and reduces the penalty taking into consideration overall facts and circumstances, they would give up the issue of classification as of now; that irrespective of whether the goods imported by the appellant is classified under CTH 8705 or any other tariff heading, there is no implication as the goods has end use application for construction of national highway, therefore, the exemption is available & no malafide can be attributed.

The AR reiterated the findings of the original authority.

The Bench observed -

++ We find that in view of facts and circumstances of the case there is no malafide intention on the part of the appellant. They only made their claim for change of classification even though in the bill of entry they initially classified the goods under CTH 8705.

++ We are of the view that merely because the appellant claimed such classification it cannot be tantamount to mis-declaration. The only implication in case of CTH 8705, Homologation certificate has to be produced and in other classification the same is not required. The whole issue gets boiled down to the point that even if it is presumed that the goods is classified under CTH 8705 the only lapse on the part of the appellant is that they have not produced Homologation certificate.

++ It is also observed that the claim of the appellant of classification under CTH 8413 does not benefit them in respect of custom duty, for the reason that the goods falling under CTH 8705 or 8413, both are eligible for exemption notification No 21/2002-Cus.

The Tribunal concluded thus -

+ The issue of classification is kept open.

+ Redemption fine and penalty imposed by the Adjudicating authority require reduction. The redemption fine is reduced from Rs.5lacs to Rs. 1 lacs and penalty from Rs.50,000/- to Rs.10,000/-.

The Appeal was partly allowed.

(See 2016-TIOL-2117-CESTAT-MUM )