Legal principle

A test report on samples drawn from one consignment cannot be applied to determine the classification of other consignments, and where imports were declared on supplier documents and the bills of entry were finally assessed, the extended period of limitation cannot be invoked for a reclassification demand.

Court decision

The Tribunal held that the test of one particular consignment cannot be used to decide the classification of previous consignments, and that for the 11 earlier consignments the appellant had declared the goods as per the bill of lading and commercial invoices with the bills of entry finally assessed, so there was no suppression or misdeclaration and the extended period could not be invoked, making the demand clearly hit by limitation. Holding the impugned order unsustainable, the Tribunal set it aside and allowed the appeal in favour of P K Exim.

Facts

P K Exim filed bill of entry no. 8924690 dated 15.04.2015 at Mundra for goods declared as Lime Mortar (Slaked Lime) imported from M/s Chemical China Co. Limited. DRI Gandhidham officers examined the consignment, and the Customs House Laboratory, Kandla reported the product as not slaked lime but a product prepared from slaked lime with metallic additives, not classifiable in Chapter 25. On this basis the department alleged misdeclaration/misclassification under CTH 25222000, contending correct classification under CTH 38245090, and issued a SCN proposing reclassification, confiscation, penalties under sections 112(a) and 114, differential duty of Rs 1,39,845 with interest under section 28A, also covering 11 past consignments. An ex-parte OIO dated 14.03.2018 was passed (no reply or appearance by the appellant), which the Commissioner (Appeals) upheld on 31.05.2019, leading to this appeal.

Key provisions

• Section 28A, Customs Act, 1962 —  Power not to recover duties not levied or short-levied as a result of general practice
• Section 112(a), Customs Act, 1962 — Penalty for improper importation of goods
• Section 114, Customs Act, 1962 — Penalty for attempt to export goods improperly etc
• Section 111(m), Customs Act, 1962 — Confiscation of improperly imported goods etc