TMI Blog2019 (7) TMI 12X X X X Extracts X X X X X X X X Extracts X X X X ..... p, it is seen that each profile is made specifically for certain purpose and designed to it with specific size of glasses or doors. It could be that they are required to cut, drilled or punched on site to give them a finished touch or to adjust to the condition. However, for this very reason, they do not seize to be already prepared for use - the impugned goods are assigned a specific product code which also appear on the designs and BOQs; and they are described as glazing frame, doorjamb, snap-in, flush panel and wielding snap-in pocket, etc. Nowhere the goods are described as Aluminium profiles per se. it is seen that the impugned goods are identifiable as items prepared for use in structure as the supplier himself identifies the same with code numbers corresponding to a particular partition system and supplies them as such. Therefore, the only conclusion that can be drawn is that the impugned goods are prepared for use in structures which are known to the foreign supplier, importer and their customers. The end-use i.e., the articles prepared for use being specially finding a mention in the Tariff are required to be classified accordingly - the goods are classifiable un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .04.2012. Appeal No. C/20006/2015: Meanwhile, Based on the investigations by the Directorate of Revenue Intelligence, show cause notice F. No. VIII/26/14/2010-DRI VIC dated 10.10.2013 was issued proposing to re-classify the aluminium profiles imported by the appellant, during the period October 2008 to July 2013, through various ports and airports in India, under the heading 7610 of CTH; to demand differential duty of ₹ 73, 03,769 along with interest and to impose penalties on the company and Shri Prabhprit Singh Kochar. Commissioner of Customs, Bangalore, vide OIO No. BLR-CUSTM-000COM-029-14-15 dated 10.10.2014, confirmed the reclassification and demand imposing equal penalty under Section 11 AC. He also imposed penalty of ₹ 18, 65,500 on Shri Prabhprit Singh Kochar penalty under section 112(a) of the Customs Act, 1962, who is before us with appeal no C/20001/ 2015. 2. Learned counsel for the appellants submits that Aluminium profiles imported are flat profiles of uniform cross section, which cannot be termed as aluminium parts prepared for use in structures falling under CTH 7610 since these goods are cut and drilled on site as per ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ue relating to aluminium shapes and sections being subjected to certain process which will make them prepared for use in structure . Therefore, the claim for classification by the appellant under 76.04 should be upheld. 2.4. Learned Counsel submits that Heading 76.10 will cover usage in structures relates mainly to buildings or other large immovable property. In the present case, neither the imported profiles are prepared for use in structures nor the partitions which are installed can be termed as structures and hence the said heading would not apply. The catalogues relied upon in the show-cause notice itself states that partitions which are fixed out of these materials could be easily removed and used at other sites. He relies on Rail Tech Vs CCE 2000 (120) ELT 393 (T). 2.5. Learned Counsel submits that Commissioner erroneously observed that (para 37.2 and 37.3) the foreign supplier catalogues do not mention that they would supply profiles but only specifies about partition systems is erroneous and contradictory to the documents which are relied upon in the show cause notice. JEB Catalogue, in first, clearly states that they provide different types ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (i) Tribunal s order No. 21129/2018 dated 08.08.2018 in the case MVR Chemicals in appeal No. E/631/2009 (ii) Puma Ayurvedic Herbal (P) Ltd vs. CCE, Nagpur, 2006(196) ELT 3 (SC) (iii) Union of India Vs. Garware Nylons Limited, 1996 (87) ELT 12 (S.C.) 3. Learned Counsel also submits that Commissioner (appeals), Chennai vide OIA No. 849/2011 dt. 17.10.2011 dropped the demands and accepted the classification under the heading 7604. This order has not been challenged. Therefore, the issue covered under the said order attains finality. He relied upon. (i) Boving Fouress Ltd Vs. CCE, 2006(202) ELT 389(SC) (ii) CCE Vs. Surcoat Paints (P) Ltd, 2008 (232) ELT 4 (SC) (iii) CCE Vs. Gujarat State Fertilizers Chem. Ltd. 2008 (229) ELT 9 (SC) 3.1. Learned Counsel submits that Commissioner erroneously contends that the said order (849/2011 dated 17.10.2011) was not appealed on the basis of monetary limits. In terms of the CBEC instructions (dated 20.10.2010 17.08.2011) as applicable during the relevant period of time, the matters relating to classification was out of such matters ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... narrated above, clearly establish that the appellant has been importing the goods and also under bona fide belief, adopting the classification under CTH 7604. Based on the fact that the Commissioner (Appeals), Chennai accepted the classification under 7604 and the said order not being challenged, the appellant was under impression that the classification has been accepted. Therefore, as there is no intention to evade, no penalty could be imposed. He relies upon. (i) Gabbar Engineering Co vs. CCE 2009 (244) ELT 552 (Tri. Ahmd.) (ii) Alembic Ltd vs. CCE 2009 (241) ELT 439 (Tri-Ahmd.) 5. In respect of appeal No C/20001/2015, Learned Counsel further submits that penalty cannot be imposed as the goods in question have been assessed and appropriate duty was also paid. Therefore the question of confiscation would not arise and hence provisions of Section 112(a) would not be applicable. Entire issue relates to change in the classification of the imported goods. The department at Chennai, Mumbai and Bangalore ports/ airports disputed the classification adopted by the appellant. However, at Chennai and Mumbai, the classification was accepted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... T. 339 (Tri. - Del.), that it was essentially for the appellants to lead necessary evidence in that regard. Mere rising of plea in answer to the show cause notice does not by itself mean the proof of correctness of such plea; Mere production of photographs does not amount to proof in support of such plea. This case was upheld by Allahabad High Court 2012 (276) E.L.T. A61 (All.) . It was held by Bombay High Court in D.R. Enterprises Limited Vs Assistant Collector Of Customs, SIIB 2002 (147) E.L.T. 3 (Bom) and affirmed by Supreme Court in 2015 (322) ELT 795 that the general Rule is that the burden of proof lies on the party asserting a particular fact to be true. 6.2. Learned AR submitted that the following is the evidence for Classification of impugned products under CTH 7610. Product catalogues, technical write up submitted by the importers describe the goods as parts of structures only; each part is made specifically for certain purpose and designed to fit in specific sizes of glasses or making specific sizes of door frames; each profile is designed to fit certain specific category/size of the glass or to make specific sized door frames; t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... prises Vs CC Mumbai 2011 (267) E.L.T. 546 (Tri. - Mumbai) (ii) Chaya graphics (India) Pvt. Ltd. Vs CC, Bangalore 2018 (362) ELT 911 (Tri. - Bang.) 6.3. Learned AR further submits that the appellants argument that the impugned goods are cut to size to erect/ install the said structures is not acceptable as drilling is a minor process carried out at site; profiles are usually cut on site, making it possible to incorporate last minute changes in layout or to adjust site conditions; impugned goods have all essential characteristics of profiles prepared for use in structures before import; Documentary evidences clearly suggest that the impugned goods are specifically designed for use in glass partition and door frames; Appellants, vide letter dated 22.01.2010, themselves admitted that the impugned goods basically used for glass non-load bearing partitions and skirting, which is nothing but used as parts of structures. 6.4. Learned AR also submits that the appellant claims imported goods to be hollow profiles (falling under 7604) but they did not produce any evidence of carrying out processes on impugned goods resulting in prepared for use i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rongly interpreted the Rule 3(a); Classification needs to be done based on the relevant explanatory notes and chapter notes, the technical write up, the purchase order placed by the appellants on their overseas suppliers and the purchase orders placed on the appellants by the customers, the letter dated 22.01.2010 of the appellants; specific description of the goods is under CTH 76109030. Learned AR further submits that OIA, 849/2011 dated 17.10.2011, passed by CC(Appeals), Chennai was not accepted on merits; no appeal was filed on the grounds of monetary limits, the decision of Commissioner (Appeals) does not have any value of precedence as facts of both the cases are different. Learned AR further submits that appellants claim on Affidavit, registration certificates and payment of service tax are of no use; appellants by themselves submitted that they are dealing in various types of products and materials; engaged in imports and erection, commissioning and installation services; just because importer is paying service tax, exemption cannot be granted from payment of custom duties; impugned goods, at the time of import, are of the nature/ state which fit them into the classificatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... door frames; each profile is designed to fit certain specific category/size of the glass or to make specific sized door frames; the profiles are usually cut on site, making it possible to incorporate last minute changes in layout or to adjust site conditions; the profiles imported has all the essential characters of profiles prepared for use in structures. 7.1. For a proper understanding of the issue, it is required to have a look at the relevant Section/Chapter notes and explanatory notes to HSN. Chapter Note to Chapter 76 defines profiles as follows: (b) Profiles- Rolled, extruded, drawn, forged or formed products, coiled or not, of a uniform cross-section along their whole length, which do not conform to any of the definitions of bars, rods, wire, plates, sheets, strip, foil, tubes or pipes. The expression also covers cast or sintered products, of the same forms, which have been subsequently worked after production (otherwise than by simple trimming or de-scaling), provided that they have not thereby assumed the character of articles or products of other headings. 7.2. Description of items under CTH 7604 is as follows. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oods made of copper. The provisions of the Explanatory Note to heading 74.07 apply therefore, mutatis mutandis, to this heading. The heading does not cover: (a). Rods and profiles, prepared for use in structures (heading 76.10). (b). Coated welding electrodes, etc. (heading 83.11) Explanatory Note to heading 74.07 read as under: The products of this heading are usually obtained by rolling, extrusion or drawing, but may also be obtained by forging (whether with the press or hammer). They may subsequently be cold-finished (if necessary, after annealing) by cold-drawing, straightening, or other processes which give the products a finish of higher precision. They may also be worked (e.g., drilled, punched, twisted or crimped), provided that they do not thereby assume the character of articles or of products of other headings. The heading also covers hollow profiles including finned or gilled tubes and pipes obtained by extrusion. However, tubes and pipes to which fins or gills have been attached, e.g., by welding, are excluded generally heading 74.19. Bars and rods obtained by casting (including ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e structures are characterized by the fact that once they are put in position, they generally remain in that position. They are usually made up from bars, rods, tubes, angles, shapes, sections, sheets, plates, wide flats including so-called universal plates, hoop, strip, forgings or castings, by riveting, bolting, welding, etc. Such structures sometimes incorporate products of other headings such as panels of woven wire or expanded metal of heading 73.14. Parts of structures, elements of round cross-section (tubular or other): These devices usually have protuberances with tapped holes in which screws are inserted, at the time of assembly, to fix the clamps of the tubing. A part from the structures and parts of structures mentioned in the heading, the heading also includes products such as: Pit head frames and superstructures; adjustable or telescopic props, tubular props, extensible coffering beams, tubular scaffolding and similar equipment, sluicegates, piers, jetties and marine moles; lighthouse superstructures ; masts, gangways, rails, bulkheads, etc., for ships; balconies and verandahs, shutters, gates, sliding doors; assembled railings and fencing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tment relies heavily on the manner in which the impugned goods are described by the supplier s company and the brochures, etc. It was submitted by the Authorised Representative (AR) that the appellants vide their letter dated 22.1.2010 have submitted that they are dealing in Aluminium profiles basically used for glass non-load bearing partitions and skirting thereby meaning that they are used in structures such as partitions and skirting. He further submits that the impugned goods are known by specific part number such as SAP04/M-45 MM Glazing Mainframe; SAP008- Doorjamb to suit doors up to 50mm thick; SAP011/A-Snap in flush panel and SAP016 Wide line snap in pocket. The appellant submit that in order to undertake the operation of erection, installation and commissioning at the sites involves designing, cutting, fixing of glasses and erection of structures. The department contends that these activities are not relevant for the classification as they do not change the essential character of goods imported and in any case it is not the case of the appellants that they have obtained registration and paid duty on such activity at site. The importer deals with profiles of standard len ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pecific size of glasses or doors. It could be that they are required to cut, drilled or punched on site to give them a finished touch or to adjust to the condition. However, for this very reason, they do not seize to be already prepared for use . As seen above, impugned goods are assigned a specific product code which also appear on the designs and BOQs; and they are described as glazing frame, doorjamb, snap-in, flush panel and wielding snap-in pocket, etc. We find that nowhere the goods are described as Aluminium profiles per se. it is seen that the impugned goods are identifiable as items prepared for use in structure as the supplier himself identifies the same with code numbers corresponding to a particular partition system and supplies them as such. Therefore, the only conclusion that can be drawn is that the impugned goods are prepared for use in structures which are known to the foreign supplier, importer and their customers. Therefore, going by the spirit of the Supreme Court s decision above, it is to be seen that the impugned goods are traded as useful only to particular structures and therefore, are to be treated as prepared for use in such structures. We further find ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ved at the classification in the impugned order correctly as per discussion above and hence, the case laws submitted by them in this regard are of not much help and moreover, identical issue is not dealt in those cases. Therefore, no reliance can be placed on them. 10. The appellants contended that Commissioner (A), Chennai vide order No.849/2011 dated 17.10.2011 dropped the demands and accepted the classification under Heading 7604; the said order has not been challenged by the department and therefore, the issue has attained finality. The learned AR submits that the said order was not accepted on merits but an appeal was not filed on the monetary considerations. He further submits that there is no estoppel in taxation matters. We find that the said order of Commissioner (A) pertains to Chennai and just for the reason that the same has not been appealed against, the present proceedings cannot be held to be void. We find that there is no estoppel in taxation matters. 11. In addition to the issue of classification, imposition of penalty under Section 114A of the Customs Act, 1962 on the appellants and imposition of penalty on Shri Prabprit Singh Kochar is a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fore the Tribunal at Bangalore. This being the factual scenario, there cannot be existence of mens rea and hence no penalty could be imposed. We find force in the argument put forth and hold that for this reason, penalty imposed on Shri Prabprit Singh Kochar (in respect of appeal No. C/2001/2015) does not stand scrutiny. Further, the appellants have submitted that there was a mistake in the quantification of duty and certain bills of entries where the goods have been classified under 7610 and wherein appropriate duties have been paid have also got included. In order to re-quantify the amount of duty applicable for the normal period giving allowance to the Bills of Entry wherein duty was paid correctly, the matter requires going back to the original authority. 12. In view of the above, appeal Nos C/1810/2012 and C/2001/2015 are allowed in toto. In respect of appeal No C/2006/2015, we hold that demand is restricted to the normal period and we set aside the penalty imposed. Accordingly, we remand the appeal No C/2006/2015 to the original authority with a direction to quantify the duty for normal period giving allowance to the Bills of Entry wherein duty has been paid corr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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