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TMI Blog2024 (3) TMI 1188X X X X Extracts X X X X X X X X Extracts X X X X ..... 782822/14.06.2011, 4088758/15.07.2011, 4164371/25.07.2011, 4176057/26.07.2011 Order-in-Appeal C.Cus. II No. 548/2015 dtd. 29.05.2015 Differential duty demand of Rs.28,25,739/- Penalty Rs.50,000/- u/s 112(a) of the Customs Act, 1962 3. C/41715/2017 Kisankraft Machine Tools Pvt. Ltd. 7678255/16.08.2012, 8322952/26.10.2012, 7162275/20.06.2012, 6727767/03.05.2012 Order-in-Appeal C.Cus. II Nos. 348 to 350/2017 dtd. 24.04.2017 Differential duty demand of Rs.31,80,608/- plus equal penalty u/s 114A of the Customs Act, 1962 4. C/41716/2017 Kisankraft Machine Tools Pvt. Ltd. 5323114/20.11.2011, 6078000/23.02.2012 Differential duty demand of Rs.4,17,777/- plus equal penalty u/s 114A of the Customs Act, 1962 5. C/41717/2017 Kisankraft Machine Tools Pvt. Ltd. 9678154/25.03.2013, 9473984/04.03.2011, 9251108/07.02.2012, 9349291/08.02.2013 Differential duty demand of Rs.11,56,756/- plus equal penalty u/s 114A of the Customs Act, 1962 6. C/40178/2020 Kisankraft Ltd. [Formerly 'Kisankraft Machine Tools Pvt. Ltd.'] 4941445/18.04.2016, 5283424/17.05.2016, 5700 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... trimming or cutting rather than reaping, croplifting, gathering, picking, threshing, binding or bundling. Their primarily use is to remove unwanted growths like weeds, small cultivations, thick grasses, and hardy hedge plants. (iii) As per the advertisement, supply orders to Govt programs and other selective material given by the appellant the impugned goods are known as 'brush cutters' or 'weed cutters' and have been purchased for use in agricultural and horticultural fields. (iv) Weight of the majority of machines varies from 10-12 Kgs and are designed to be handled by a single operator and carried in hand. (v) Explanatory Notes to heading 8467 at Sl no 19 gives exact specifications of machines included in the heading and includes portable brush-cutters with a self-contained motor, a drive shaft (rigid or flexible) and a tool holder. (vi) In terms of the Explanatory Notes to HSN the machines of CTH 8433 are used in place of hand tools for agricultural operations. The machines for working in hand are thus excluded from the CTH 8433. (vii) In terms of Note 2(b) of Section XVI, parts of brush cutter will be classifiable under CTH 84679900. Appellant's Averments 5. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... only where the meaning is not manifest. If the words are plain and clear and directly convey the meaning, there is no need for any interpretation. 7. It is not dispute that the Schedule to the Customs Tariff in itself does not contain a specific heading for "Agricultural Reaper" and its parts. There is also no dispute that though different models of goods have been imported all are sought to be classified under one heading. Finally, it is also not disputed that the impugned goods are marketed and known in the trade as "brush cutters" as also seen from the product literature and the tender notices etc. enclosed with the appeal. 8. In M/s Indo International Industries v. Commissioner of Sales Tax, Uttar Pradesh, [1981 (2) SCC 528], it has been held by the Apex Court that "if any term or expression has been defined in the enactment then it must be understood in the sense in which it is defined but in the absence of any definition being given in the enactment the meaning of the term in common parlance or commercial parlance has to be adopted". In Plasmac Machine Manufacturing Co. Pvt. Ltd. v. Collector of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h reflects the Appellants choice covers 'HARVESTING OR THRESHING MACHINERY, INCLUDING STRAW OR FODDER BALERS; GRASS OR HAY MOWERS; MACHINES FOR CLEANING, SORTING OR GRADING EGGS, FRUIT OR OTHER AGRICULTURAL PRODUCE, OTHER THAN MACHINERY OF HEADING 8437'. The impugned goods which are handheld machines, would at first sight and by its popular name as 'brush cutter', be more suitable to be classified under CTH 8467. However, the goods due to the dispute in their classification needs to be examined with support from the HSN. 10. As per Explanatory Notes to heading 8467 the tools included under the heading are shown in a list and include at Sl. No. 19, portable brush-cutters with a self-contained motor, a drive shaft (rigid or flexible) and a tool holder, presented together with various inter changeable cutting tools for mounting in the tool holder. Whereas portable machines for trimming lawns, cutting grass in corners, along wall, borders or under bushes which have a selfcontained motor in a light metal frame and a cutting device usually consisting of a thin nylon thread are included at Sl. No. 18 of the said list. Revenue feels that the description at Sl. No. 19 fits the impugned goo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ematical symbols and formula, especially in the case of legal matters, enactment or notifications, may not at all times be achieved. As said "It is difficult to expect the Legislature carving out a classification which may be scientifically perfect or logically complete or which may satisfy the expectations of all concerned". The inability of words to achieve precision at times makes it necessary, as discussed above, to understand the legislative intent by the one principle which is fairly well settled by a catena of judgments by the Supreme Court, that words and expressions describing goods in a taxing statute should be construed in the sense in which they are understood in the trade, by the dealer and the consumer. The reason is that it is they who are concerned with it and it is the sense in which they understood it which constitutes the definitive index of the legislative intention. This perhaps reflects the Constitutional Court's thinking on the inability of the English language to convey complex technical information with a high degree of legal certitude in the classification of goods and services. The goods from their description, weight, common use understanding, pict ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ddition, it is also pertinent to mention here that immediately on receipt of audit findings, the importer was issued a letter vide F. No. TA/116085/2017 Gr. 5 dated 20.11.2017 for effecting payment of short-levied duty in this case, within the ambit of two years from the relevant date. The importer has also submitted written submissions dated 24.1.2018 to the aforesaid letter. Therefore, the importer cannot take refuge under the allegation that demand is time-barred and deviate from the main issue of mis-classification which resulted in short-levy of duty. . . . . In this case, it is not alleged in SCN that this is a case of suppression of facts alone but SCN has emphasized on mis-classification of impugned goods despite the fact that importer was aware of the issue and on several occasions, classification have already been decided by department by the way of issuance of several Order in Originals since 2012. The importer have themselves stated that they started classifying the goods under CTH 8467 and paid the duty under protest for some period. However, on gaining AEO status in 2016, the importer reverted to previous CTH 8433. Further, there is no documentary evidence on record w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... specifically stated so in the statute. Similarly, the importer is required to make a true declaration of the description and quantity of goods etc which have actually been imported and not just the goods as declared in the import documents. Thus, if the goods actually imported are more in number or the actual description or CTH as determined by an order under the Act is different from what is declared in the Bill of Entry, the importer would have made a mis-declaration. If this is done knowingly it's a willful misstatement. 16. In Associated Cement Companies Ltd. Versus Commissioner Of Customs [2001 (128) ELT 21 (S.C.)], the Apex Court observed; "52. Though it was sought to be contended that Section 28 of the Customs Act is in pari materia with Section 11A of the Excise Act, we find there is one material difference in the language of the two provisions and that is the words "with intent to evade payment of duty" occurring in proviso to Section 11A of the Excise Act are missing in Section 28(1) of the Customs Act and the proviso in particular." "with intent to evade payment of duty" hence is not an essential condition for evoking the extended time limit, if the statute so provid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee proposing to demand duty on the basis of the price at which its distributor sold the goods in the course of whole sale trade on the ground that the said distributor was a related person. The assessee contended that so far as the demand of duty on the basis of the distributor being a related person is concerned, there has been no suppression of fact and all these facts were before the concerned authorities and part of earlier show cause notices, therefore, it was not open to the Central Excise authorities to invoke proviso to Section 11A of the Act for making a demand of duty for the extended period. The Hon'ble Supreme Court held that the necessary facts had been brought to the notice of the authorities at different intervals from 1985 to 1988 and further, they had dropped the proceedings accepting that the distributor was not a related person. It has been held that in such circumstances, it could not be said that there was any willful suppression or misstatement and that therefore, the extended period under Section 11A could not be invoked. b) ECE Industries Ltd. v. Commissioner - 2004 (164) E.L.T. 236 (S.C.): The facts of the case are that a Show Cause Notice was issued ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nds on its own facts and a close similarity between one case and another is not enough because even a single significant detail may alter the entire aspect, in deciding such cases, one should avoid the temptation to decide cases (as said by Cordozo) by matching the colour of one case against the colour of another. To decide therefore, on which side of the line a case falls, the broad resemblance to another case is not at all decisive." We hence need to look into the matter in a little more detail. The fact of this case is that although there was a dispute in the classification of imported goods, the same came to be finalised by the Department. The procedure culminated in the issue of a speaking order determining the classification of the impugned goods under the Customs Act. Once a classification of imported goods is decided in a particular manner by an order of the proper officer passed under the Act it has to be honored till it is upset in appeal proceedings. If not it will create an impossible situation in which orders get disregarded and the department perpetually issue notice to the importer whose classification has been settled but who continues to knowingly mis-state / mis- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... een defeated in quasi-judicial proceeding can continue to be recognized as legitimate and duty short paid. A valid order determining the CTH of the imported goods and a statutory document filed for the same goods knowingly misstating the CTH cannot coexist legally and be recognised in law to be valid. It cannot be said that ordinary prudence has been exercised by the importer-appellant according to the standards of a compliant tax payer or even a reasonable person. It violates the undertaking given as mandated by section 46(4) of the Customs Act, 1962 in the Bill of Entry by the appellant which forms the foundation for the trust based self-assessment envisaged by the Act. The undertaking is meant to carry out the intent of the statute and accomplish the reasonable objectives for which it was passed and thus cannot be brushed off as being merely procedural. 19.3 We find from the series of appeals being considered in this order that the classification of 'brush cutters' was reclassified from CTH 84339000 to CTH 84672900 vide Order in Original No. 21310/2013 dated 17.7.2013 which has been upheld by the Commissioner (Appeals) vide Order in Appeal C. Cus. No. 434/2014 dated 10.3.2014. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eed with an assumption that the legislature enacting the statute has committed a mistake and where the language of the statute is plain and unambiguous, the court cannot go behind the language of the statute so as to add or subtract a word playing the role of a political reformer or of a wise counsel to the legislature. The court has to proceed on the footing that the legislature intended what it has said and even if there is some defect in the phraseology etc., it is for others than the court to rectify that defect. The statute requires to be interpreted without doing any violence to the language used therein. The court cannot re-write, recast or reframe the legislation for the reason that it has no power to legislate. 21. The Hon'ble High Court of Madras in King Bell Apparels v. Commissioner of Central Excise, Salem [2019 (365) E.L.T. 681 (Mad.)] held that the contention that once knowledge has been acquired by the department, there is no suppression and the ordinary statutory period of limitation would be applicable was rejected as a fallacious argument inasmuch as once the suppression is established, merely because the department acquires knowledge of the irregularity, t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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