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2015 (2) TMI 175 - AT - CustomsWrong classification of goods - Mis declaratio of goods - Imposition of penalty - Held that:- According to Note 2(b) of Section XVI of Customs Tariff Act, 1975, parts, if suitable for use solely or principally with a particular kind of machine, or with a number of machines of the same heading, they are to be classified under the heading of the same machines. However, in this case, many of the items were found to be of general use and not found suitable for use solely or principally with the machines manufactured and sold by the appellants. The learned counsel fairly agreed that the investigating officers had considered this aspect and had omitted several items while issuing show cause notice which were actually solely or principally used with the machines manufactured by them. Under these circumstances, the appellants clearly have no case on merits at all. Further the observations of the Commissioner reproduced above and not contested by the learned counsel or by the appellants at any stage and coupled with the description of the inputs and Bills of Entry would clearly show that there was a misdeclaration of the goods in the classification. If the appellants were not to mention the machine number/machine description with the items imported which amounted to stating that they were proposed to be used or useful solely or principally with the machine manufactured by them, if the items were of general use, this claim clearly is a misdeclaration. Provisions of Section 28 which provides for non-issue of show cause notice wherein the importer pays the entire amount of duty with interest would not be applicable to the appellants at all. Therefore, this claim of the appellant’s counsel that no proceedings should have been initiated cannot be accepted and is denied. Similarly the duty demand and the interest thereon also has to be upheld as not contested. - Since the misdeclaration has been established and appellant is not eligible for the benefit claimed by them, it is clearly a case of misstatement of facts and as a result appellant is liable to penalty under Section 114A of the Customs Act, 1962 and therefore, penalty imposed is upheld. - there is no allegation of any activity covered by Section 114AA which is actually not covered by Section 114A. Therefore, in our opinion, under the facts and circumstances of this case, penalty under Section 114AA need not be imposed. - penalty under Section 114AA is set aside and in respect of all other issues, appeal is rejected - Decided partly in favour of assessee.
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