Legal principle

Products in coil form are 'wire' under note 1(f) to Chapter 74 and cannot be classified as 'bars and rods' under note 1(d), so declaring coiled copper as heading 7407 correctly forfeits the CEPA exemption confined to 7405–7407, while the extended period under Section 28(4) turns on whether the decisive facts were disclosed in documents filed with the Bill of Entry.

Court decision

The Tribunal upheld the department's reclassification, directing that Tariff Heading 74081190 is the appropriate heading: the goods were admittedly in coil form and thus 'wire', the COO submitted was incorrect (since HSN codes are allied across countries and could not have differed in South Korea), and the denial of the CEPA exemption and demand of BCD @5% were correct. On limitation and penalties, however, the Tribunal found that although the decisive fact of coil form was not declared in the Bills of Entry, the packing list mentioned 'Coil No' and the COO cryptically recorded 'CL', and since the record did not show whether these documents accompanied the Bills of Entry, it remanded the matter to the adjudicating authority to verify this and construe limitation accordingly—if the coil description was sufficiently reflected in documents provided in the system, limitation benefit beyond the normal period could be permitted, failing which the extended period and penalties would sustain. The appeal was partly allowed by way of remand.

Facts

M/s Shakti Insulated Wires Pvt Ltd imported 'Copper Rod Nominal Dia 8mm with ASTM B49' from a South Korean supplier through Bills of Entry filed between June 2017 and August 2017, claiming NIL basic customs duty under the India–Korea CEPA (Notification 152/2009 read with Notification 187/2009-Cus (NT)) and classifying the goods under CTH 74071020. The department asserted the goods should be classified as copper wire under CTH 74081190, which is not exempt under the CEPA notification, and demanded BCD @5% by Show Cause Notice dated 19.06.2019. The SCN was adjudicated by OIO dated 19.11.2019, which the Commissioner (Appeals) upheld by OIA dated 22.12.2020, prompting the appeal before CESTAT, Ahmedabad.

Key provisions

• Section 28, Customs Act, 1962 — Recovery of duties not levied or not paid or short-levied or short- paid or erroneously refunded
• Section 111(m), Customs Act, 1962 — Confiscation of improperly imported goods etc
• Section 46(4), Customs Act, 1962 — Entry of goods on importation
• Section 28DA, Customs Act, 1962 — Procedure regarding claim of preferential rate of duty
• Section 5(1), Customs Tariff Act, 1975 — Levy of a lower rate of duty under a trade agreement