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TMI Blog2024 (1) TMI 465X X X X Extracts X X X X X X X X Extracts X X X X ..... as observed by the officer that the goods imported namely "Flanges" under the above Bill-of-Entry were wrongly classified under Customs Tariff Item No. 85030090/84839000 instead of Customs Tariff Heading (CTH) 7307, which attract BCD @ 10% and IGST @ 18%. 2.1 It appears that there was a Pre-consultative Notice dated 21.10.2022 to the importer and the importer responded through its letter dated 07.11.2022, but however, it appears that the Additional Commissioner issued a Show Cause Notice dated 09.11.2022 thereafter, by ignoring the reply of the importer to the Pre-consultative Notice. The proposals in the Show Cause Notice were: - a. Rejection of the classification adopted by the importer for the goods in question under CTH 8503 and re-classifying the same under CTH 7307 which attracts BCD @ 10%, SWS @ 10% and IGST @ 18%. b. Demand of the differential duty amounting to Rs.10,88,434/- under Section 28(1) of the Customs Act, 1962. c. Demand of interest on the short-levied duty under Section 28AA of the Customs Act, 1962. d. Confiscation of the imported goods valued at Rs.3,35,42,154/- under Section 111(m) of the Customs Act, 1962; and e. Imposition of penalty on the import ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hem were clearly classifiable under CTH 8503 alone, they believed in good faith that the flanges so imported did also fall under CTH 8503 as they were to be used in the manufacture of the above final products. 8. The disputed classifications under both Customs Tariff Headings read as under: - CTH 7307: 7307 TUBE OR PIPE FITTINGS (FOR EXAMPLE, COUPLINGS, ELBOWS, SLEEVES), OF IRON OR STEEL - Cast fittings: 7307 11 -- Of non-malleable cast iron: 7307 11 10 --- Sponge iron cast fittings kg. 10% 7307 11 20 --- SG iron cast fittings kg. 10% 7307 11 90 --- Other kg. 10% 7307 19 00 -- Other kg. 10% - Other, of stainless steel: 7307 21 00 -- Flanges kg. 10% 7307 22 00 -- Threaded elbows, bends and sleeves kg. 10% 7307 23 00 -- Butt welding fittings kg. 10% 7307 29 00 -- Other kg. 10% - Other : 7307 91 -- Flanges : 7307 91 10 --- Galvanised kg. 10% 7307 91 90 --- Other kg. 10% 7307 92 -- Threaded elbows, bends and sleeves : ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... seen from paragraph 23, wherein he has taken a leap to the explanation from the Chapter Note, to hold that 'it was evident for him' that the flanges in question were not covered under CTH 8503, which was sufficient for him to not to accept the classification sought for by the importer. But however, we do not see any basis for such assumption by the adjudicating authority from the record. 10.1 CTH 8503, which is extracted supra, covers parts suitable for use solely or principally with the machines coming under CTH 8501 or CTH 8502. CTH 8501 covers electric motors, generators and the like, while CTH 8502 covers electric generating sets, rotary converters and the like, both may not be forming specific parts of or used in an automobile industry. On the other hand, CTH 7307 covers tube or pipe fittings of iron or steel like couplings, elbows and the like, and below that we find the entry prefixed by a single ' - ': cast fittings. It is of utmost importance for the Revenue which has disputed the classification to at least make a prima facie case to bring the goods under dispute close to the heading under 7307. In any case, it is not the case of the Revenue that the impugned goods in que ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as observed by the adjudicating authority at paragraph 15 of the Order-in-Original, "classification of imported goods under the first schedule of the Customs Tariff Act, 1975 is governed by the General Rules of Interpretation of Import Tariff. As per Rule of GRI, classification of goods shall be determined according to the terms of the headings and any relative Section or Chapter Notes. If such headings or notes do not otherwise require then the classification is to be determined in accordance with Rules 2 to 6 of the said Rules. Rule 6 of GRI stipulates that the classification of goods in the sub-headings of a heading shall be determined according to the terms of those sub-headings and any related sub-heading Notes and, mutatis mutandis, to the above rules, on the understanding that only sub-headings at the same level are comparable. For the purposes of this rule the relative Section and Chapter Notes also apply, unless the context otherwise requires." Considered thus, it becomes clear that CTH 8503 is more specific, whereas on the present set of facts, CTH 7307 is akin to a residuary entry/general compartment, which is applicable only if the goods in question do not fall within a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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