2022(07)LCX0112

Delhi Tribunal

De-Diamond Electric India Pvt. Ltd

Versus

Principal Commissioner of Customs

CUSTOMS APPEAL NO. 50641 OF 2021 decided on 04/07/2022

CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL
NEW DELHI.

PRINCIPAL BENCH, COURT NO. 1

CUSTOMS APPEAL NO. 50641 OF 2021

[Arising out of the Order-in-Original No. 25/2020/M.K.S./Pr. Commr./ICDImport/TKD dated 24/12/2020 passed by Principal Commissioner, Customs (Import), ICD, TKD, New Delhi –110 020.]

M/s De-Diamond Electric India Pvt. Ltd.,                    …Appellant
Plot No. 38, Sector – 5, Growth Centre, HSIIDC, Bawal,
District Rewari (Haryana) – 123 501.

Versus

Principal Commissioner                            …Respondent
of Customs (Import)
Inland Container Depot, Tughlakabad,
New Delhi – 110 020

APPEARANCE:
Shri Ved Prakash Batra, Chartered Accountant for the appellant.
Shri Sunil Kumar, Authorized Representative for the Department

CORAM:
HON’BLE MR. JUSTICE DILIP GUPTA, PRESIDENT
HON’BLE MR. P.V. SUBBA RAO, MEMBER (TECHNICAL)

FINAL ORDER NO. 50560/2022

DATE OF HEARING : 07.01.2022
DATE OF DECISION: 04.07.2022

P.V. SUBBA RAO

M/s De-Diamond Electric India Pvt. Ltd., Rewari (Haryana) has filed this appeal assailing the order-in-original dated 24.12.2020 passed by the Principal Commissioner of Customs (Import), Inland Container Depot , Tughlakabad, New Delhi whereby he decided the proposal in the show cause notice dated 11.03.2020. The appellant had imported “Magnetic Iron Centre Copper/Centre Core Assembly” from Thailand through 79 bills of entry between the period 13.03.2018 and 06.03.2020. The appellant self-assessed the bills of entry and cleared the goods. Under the Customs Electronic Data Interchange system bills of entry are either cleared based on the self-assessment or sent for re-assessment to the officers by the Risk Management System .

2. In this case all bills of entry were self-assessed, and were subjected to post clearance audit. During post clearance audit, it was found that the appellant had classified the imported goods under 8505900 and paid basic customs duty of 0% + 0% Social Welfare Surcharge +18% integrated goods and services tax availing the benefit of Sl. No. 1319 of Notification No. 46/2011- CUS dated 01.06.2011, as amended. The audit team sent an audit consultative letter dated 24.12.2019 stating that the imported goods are correctly classifiable under 85119000 Customs Tariff and the benefit of exemption of Notification No. 46/2011-CUS (Sl. No. 1319) is not available to the imported goods and accordingly the duty @ 15% BCD + 10% SWS + 28% IGST are payable and requesting the appellant to pay the differential duty.

3. Thereafter, a pre-notice consultation letter dated 23.02.2020 was also issued to the appellant under the pre-notice consultations regulations 2018 and an opportunity of hearing was granted to the appellant during which Shri Sanjay Kumar, Senior Engineer of the appellant appeared and submitted that the appellant had correctly classified the goods under 85059000 and paid duty as applicable.

4. Not agreeing with the contentions of the appellant, Commissioner of Customs, Audit Commissionerate, New Customs House, IGI Airport, New Delhi issued a show cause notice dated 11.03.2020 proposing to:

(i) deny the concessional rate of duty under Sl. No. 1319 of Notification No. 46/2011-CUS for the imported goods as they were classifiable under 85119000 for which the benefit of exemption Notification No. 46/2011-CUS (Sl. No. 1319) was not available.

(ii) recover the basic customs duty along with social welfare surcharge and IGST totalling Rs. 3,67,29,710/- under Section 28 (1) of the Customs Act along with interest under Section 28AA of the Customs Act, 1962.

(iii) impose a penalty upon the appellant under Section 112(a) (ii) and Section 117 of the Customs Act, 1962.

5. The Commissioner, thereafter, passed the impugned order confirming the duty as proposed in the show cause notice, but refrained from imposing any penalty upon the appellant.

6. Aggrieved, the appellant filed this appeal on the following grounds :-

(a) self-assessment of bill of entry by the appellant is an appealable order and no appeal has been filed against the self-assessment by the Revenue before Commissioner of appeals ;

(b) the show cause notice sought recovery of amount of duty short paid or short levied without getting the classification changed by availing the appeal before the Commissioner (Appeals) by the Revenue is not sustainable or maintainable in the eyes of law ;

(c) assuming without admitting the notice valid under Section 28 there was no proposal of amendment of the classification of the impugned goods in the notice. Therefore, the alleged short paid of duty cannot be recovered without amending or modifying the classification of the impugned goods ;

(d) the Magnetic Iron Centre Core/Centre Core Assembly is correctly classifiable under Classification No. 85059000 and not under 85119000 as proposed by the Revenue ;

(e) the impugned goods being part of electro magnet is classifiable CTH 8505900 instead of Customs Tariff Heading 85119000 ;

(f) CBEC had clarified the parts of electromagnets, qua Soft Ferrite Articles, would be classifiable under CTH 8505 irrespective of their use by Circular No. 20/90-CX.4 dated 09.07.1990 and the Departmental officers are bound to follow this direction ;

(g) assuming without admitting that the impugned goods are classifiable under 85119000 concessional rate of duty under Sl. No. 1335 of Notification No. 46/2011-CUS dated 01.06.2011, as amended, is available to the appellant, which has been denied by the Adjudicating Authority ;

(h) the Commissioner (Audit) of the Customs Audit Commissionerate is not the proper officer to issue show cause notice under Section 28 of the Customs Act, 1962 as the notification where under he is empowered to issue show cause notice itself is an invalid notification ;

(i) When the demand of duty itself is not maintainable, interest thereon also cannot be recovered.

7. Learned Consultant for the appellant Shri Ved Prakash Batra, vehemently argued the above points. Learned Departmental Representative supported the impugned order and submitted that it calls for no interference.

8. We have considered the arguments on both sides and perused the records. The issues to be decided by us are:

(a) Was Revenue correct in issuing a show cause notice under Section 28 demanding differential duty without first appealing against the Bills of Entry which were self assessed?

(b) Has the Revenue not proposed change of classification in the show cause notice?

(c) Is the Commissioner of Customs, Audit Commissionerate, New Customs House, IGI Airport, New Delhi competent to issue the show cause notice?

(d) Are the imported goods classifiable under 85059000 as claimed by the appellant or under 85119000 as has been held in the impugned order?

(e) If the goods are liable to be classified under 85059000 as held by the Revenue, is the appellant entitled to the benefit of under Sl. No. 1335 of Notification No. 46/2011-CUS dated 01.06.2011?

9. Learned Consultant for the appellant vehemently argued that no demand under section 28 can be raised without first appealing against the self assessment of the Bill of Entry by the Revenue. He submitted that Finance Act 2007 has introduced the system of self-assessment of customs duty of imported goods by the importer under Section 17 (1) and the officers would have the power to verify such assessment and make re-assessment wherever warranted under Section 17 (5) of the Customs Act. He also submitted that Section 2 (ii) of the Customs Act defined assessment and it specifically included provisional assessment and self-assessment. He placed reliance on the judgment of the Supreme Court in the case of ITC Ltd. versus CCE, Calcutta IV to emphasize that self-assessment is also an order of assessment and is subject to appeal before the Commissioner (Appeals). He submits that the Revenue has not appealed against this appellant‟s self-assessment and, therefore, it cannot raise a demand under Section 28.

10. Learned Departmental Representative, on the other hand submits that a demand under Section 28 can be raised without having to assail the self-assessment by the importer.

11. We proceed to examine this issue. Learned Consultant for the appellant is correct in his submission that after 2011, Section 17 of the Customs Act was modified and a system of self assessment was introduced in respect of imports and exports. Prior to this date, assessment had to be done by the proper officer. After the system of self-assessment was introduced a provision has been made under Section 17 (5) for the officers to re-assess the bills of entry with respect to valuation, exemption, notification etc. Unless the importer/exporter accepts the reassessment in writing, the proper officer has to issue a speaking order within 15 days under Section 17 (5). Learned Consultant is also correct in his submission that the term “assessment” includes “self-assessment”. An assessment, is a quasi-judicial function performed by the officer and any assessment of bill of entry by an officer can be appealed against before the Commissioner (Appeals) by either side.

12. There would be occasions, where duty is paid in excess of what was due or short of what was due. If duty is paid in excess, a claim for refund of the duty so paid in excess can be made under Section 27 by the person who paid the duty or who has borne the duty. The question before the Supreme Court in the case of Priya Blue Industries Ltd. versus Commissioner of Customs (Preventive) and Collector versus FlocK (India) Pvt. Ltd. was whether refund could be claimed in a manner so as to modify the assessment under Section 17. The Supreme Court held that refund claim is not an appeal proceeding and the officer sanctioning the refund claim cannot sit in judgment over an assessment made by the assessing officer. In other words, refund under Section 27 is a mechanical process of sanctioning refund if the claimant is entitled to it as per the the assessment already made. The officer sanctioning the refund cannot modify the assessment done by a competent proper officer. Thereafter, in some decisions, such as, Micromax Informatics Ltd. versus Union of India, Aman Medical Products Ltd. versus Commissioner of Customs, Delhi, it has been decided by High Court of Delhi that where there is no assessment by the officer, i.e., goods are cleared through self-assessment there is nothing to be appealed against. Therefore, the refund can be sanctioned without appealing against the self-assessment. The matter was examined by a Constitution Bench of the Supreme Court in ITC Ltd. versus Commissioner of Central Excise, Kolkata IV in a batch of Civil Appeals pertaining to Customs, Central Excise as well as Service Tax. It has been held that once an assessment is made, even if it is a self-assessment no refund can be sanctioned unless such self-assessment is appealed against and modified. Thus, insofar as the refunds are concerned, the settled law is that once an assessment is complete, even if it is self-assessment, such assessment must be appealed against before claiming the refund.

13. As far as the cases where duty was short levied or short paid or not levied or not paid or erroneously refunded is concerned, unlike the provisions of refund under Section 27 (which is a mere mechanical process), a quasi-judicial process has been laid down in Section 28 of the Act. The question which arises is if the assessment is complete and there is a procedure for appeal against all assessments, including self-assessment, what is the nature of this power under Section 28. This has been clarified by the Supreme Court in Commissioner of Customs versus Sayed Ali and Canon India Pvt. Ltd. versus Commissioner of Customs as a power to reopen an assessment already made. Such a power is not inherent in any officer and is available only when it is specifically conferred by law. It is for this reason that Section 28 has a system of issuing notice and passing of adjudication orders. This power under Section 28 is subject to three limitations : (i) WHO - only the proper officer can issue a notice under Section 28 ; (ii) WHEN – within the normal period of limitation –normal or extended ; (iii) WHY – to recover the duty so paid, short levied, not paid and levied or erroneously refunded.

14. In view of the above, there is no force in the argument of the learned Consultant of the appellant that the demand under Section 28 cannot be issued without challenging the self assessment by the appellant before Commissioner (Appeals). Reliance on the judgment of Supreme Court in ITC Ltd. by the appellant is completely mis-conceived as this is not a case of refund, but is a case of demand of duty under Section 28, which is fully permissible.

15. Learned Consultant of the appellant submitted that no demand for duty can be made by the Revenue without getting the classification under the self-assessment by the appellant modified by filing an appeal before Commissioner (Appeals). This submission cannot be accepted in view of the fact that Section 28 itself gives a power of reopening of assessment to the proper officer as has been held by the Hon‟ble Supreme Court in Canon India.

16. Learned Consultant for the appellant argued that there is no proposal to amend the classification of the goods in the show cause notice. We find this is contrary to the facts as the classification of the goods by the appellant and the alternate classification proposed by the Revenue and the applicable rates of duty were discussed at length in the show cause notice particularly in paragraphs 2,3,4,5,6 and 7 and consequently the demand has been raised. Not only was the appellant made aware of the contention in the show cause notice but the appellant was also given more than adequate opportunity in the consultation letter of the audit as well as the pre-consultation notice issued before the show cause notice and the appellant was also given an opportunity of explain its case. Therefore, there is no force in this submission of the appellant. A show cause notice must be read as a whole and it makes it ample clear as to why the differential duty was being demanded.

17. Learned Consultant also submitted that the Commissioner (Audit) of the Customs Audit Commissionerate is not the proper officer to issue show cause notice under Section 28 of the Customs Act, 1962. We do not find any force in this submission. Sub-section (11) of section 28 clarifies this position. It reads as follows:

“(11) Notwithstanding anything to the contrary contained in any judgment, decree or order of any court of law, tribunal or other authority, all persons appointed as officers of Customs under sub-section (1) of section 4 before the 6th day of July, 2011 shall be deemed to have and always had the power of assessment under section 17 and shall be deemed to have been and always had been the proper officers for the purposes of this section”.

18. The vires of this sub-section was under challenge before the High Court of Delhi in the case of Mangali Impex Ltd. versus Union of India The High Court upheld its validity except to the extent of its retrospective application. The present case pertains to the period after the introduction of this subsection and therefore, the Commissioner (Audit) is the proper officer to issue a notice under section 28.

19. The next question which arises is whether the Commissioner (Audit) is „the proper officer‟ as laid down in Canon India. It has been laid down by the Supreme Court in Canon India that a notice under section 28 can be issued by not any proper officer but „the proper officer‟, i.e., the one who has assessed the Bill of Entry in the first place.

20. In Canon India, the Bills of Entry were assessed by the officers and thereafter a show cause notice under Section 28 was issued by the officers of DRI. It was held that only „the proper officer‟ can issue a show cause notice under section 28 because it is a case of review or reopening of an assessment already made and it can be done by only such officer who has assessed in the first place or his successor in office. The present case is different inasmuch as there was no assessment of Bills of Entry by any officer. In fact, in a very large number of cases, now the goods are cleared based on self assessment by the importer under section 17(1) of the Customs Act and the Group Appraising officer will not even have an occasion to review the self assessment under section 17(5). The present is one such case and there is no proper officer who had done the assessment. The reason for this arrangement is simple. With increasing international trade, if clearances have to be expedited not every consignment can be assessed by the officer. The RMS of the Customs EDI System selects some cases for assessment and others are cleared based on self- assessment. Thus, there is no proper officer doing the assessment. Such clearances are subjected to post clearance audit and it is the audit officers. Evidently, the officers who so audit the self assessed bills of entry are the first ones to look into the assessment. Only they can be the proper officers to issue a notice. If it is held in cases of clearance based on self assessment, the one who has done assessment under section 17 can only issue a show cause notice under section 28, it will lead to absurd conclusions because the assessment was done by the importer itself and so a notice will have to be issued by the importer to itself. Therefore, in our considered view, „the proper officer‟, as held in Canon India, in cases of self assessment can only be the officer who audited the self assessment. In this case, it was the Commissioner (Audit). It is true that there were other officers under the Commissioner (Audit) who identified the alleged discrepancies and even issued consultative letters so as to resolve the issues without going through the process of notice and adjudication. These did not resolve the issue and the show cause notice was issued under section 28 which is the first quasi-judicial process in this case and in similar other cases where the goods were cleared through self –assessment. The processes before the issue of show cause notice are consultative processes to resolve the issues which are akin to the discussions which the assessing officer or others assisting him such as the examining officers have during assessment by the officer under section 17(5). If the issues do not get resolved at that stage, the assessment is under section 17(5) by the proper officer and a speaking order is issued which will be the first quasi-judicial process. In such a case, if a show cause notice under section 28 is subsequently to be issued, it can be issued only by the proper officer who has done the assessment. In the present case and in similar cases of clearances based on self assessment, the audit, preventive or other officers who look into the assessment post clearance and who issues the show cause notice under Section 28 will be „the proper officer‟ and there is no „the proper officer‟ before that. Hence, the Commissioner (Audit) was fully competent to issue the show cause notice in this case.

21. We now proceed to discuss the issue of classification of the Magnetic Iron Centre Copper/Centre Core Assembly imported by the appellant. The appellant classified the imported goods under 85059000, while the Revenue classified it under 85119000 of the Customs Tariff. Tariff heading 8505 deals with electro-magnets including their parts while Tariff heading 8511 deals with the spark plugs and their parts. Undisputedly, the imported goods are a child part of spark plugs. The spark plugs have, as a part an electro-magnet of which the imported goods (magnetic iron core/core assembly) is a part. The case of appellant is that the core should be treated as a part of the electro-magnet and hence should be classified as such. The case of the Revenue is that the imported goods are not parts of any electro-magnets but are undisputedly parts of the spark plugs and hence they should be classified as such.

22. To decide this issue, it is important to examine the two headings and also the Rules of Interpretation of the Tariff which lay down how the classification should be decided in case of conflicting entries in the tariff. The relevant headings are reproduced below:

8505                    Electro-Magnets; Permanent Magnets and Articles Intended To Become Permanent Magnets after Magnetisation; Electro-Magnetic or Permanent Magnet Chucks, Clamps and similar holding Devices; Electro-Magnetic Couplings, Clutches and Brakes; Electromagnetic Lifting Heads

- Permanent magnets and articles intended to become permanent magnets after magnetisation ;

8505 11                  - of metal

8505 11 10             - Ferrite cores

8505 11 90              - Other

8505 19 00              - Other

8505 20 00              - Electro-magnetic couplings, clutches and brakes

8505 90 00               - Other, including parts

8511                        : Electrical Ignition or Starting Equipment of a kind used for Spark-Ignition or Compression Ignition Internal Combustion Engines (For example, Ignition Magnetos, Magneto-Dynamos, Ignition Coils, Sparking Plugs and Glow Plugs, Starter Motors); Generators (For example, Dynamos, Alternators) and Cut-outs of a kind used in conjunction with such engines

8511 10 00                - Sparking plugs

8511 20                      - Ignition magnetos; magneto-dynamos; magnetic flywheels:

8511 20 10                   - Electronic ignition magnetos

8511 20 90                  - Other

8511 30                      - Distributors; ignition coils:

8511 30 10                  - Distributors

8511 30 20                  - Ignition coils

8511 40 00                 - Starter motors and dual Purpose startergenerators

8511 50 00                 - Other generators

8511 80 00                - Other equipment

8511 90 00                 - Parts

23. It often happens that while attempting to classify goods, there could be two or more entries into which the goods may fall. The Rules of interpretation lay down how to classify such goods. Rule 1 states that the Titles of Sections, Chapters and Sub-Chapters are provided for ease of reference only; for legal purposes, classification shall be determined according to the terms of the headings and any relative Section or Chapter Notes, provided such headings or Notes do not otherwise require, according to the following provisions (of the Rules). Thus, if the Section or Chapter Notes resolve the conflict, subsequent Rules need not be referred to. The tariff is divided into sections and each Section is further divided into Chapters. The Section Notes apply to all the Chapters in the Section and each Chapter may further have its own Notes. We find that in this case, both the conflicting entries are in the same Chapter 85 of Section XVI of the Tariff Act. Chapter 85 has no Notes which resolve this dispute. Section XVI, however, has a Section Note which is relevant as it deals with how the parts of goods should be classified. It reads as follows:

Section XVI

Section note 2. Subject to Note 1 to this Section, Note 1 to Chapter 84 and to Note 1 to Chapter 85, parts of machines (not being parts of the articles of heading 8484, 8544, 8545, 8546 or 8547) are to be classified according to the following rules :

(a) parts which are goods included in any of the headings of Chapter 84 or 85 (other than headings 8409, 8431, 8448, 8466, 8473, 8487, 8503, 8522, 8529, 8538 and 8548) are in all cases to be classified in their respective headings;

(b) other parts, if suitable for use solely or principally with a particular kind of machine, or with a number of machines of the same heading (including a machine of heading 8479 or 8543) are to be classified with the machines of that kind or in heading 8409, 8431, 8448, 8466, 8473, 8503, 8522, 8529 or 8538 as appropriate.

However, parts which are equally suitable for use principally with the goods of headings 8517 and 8525 to 8528 are to be classified in heading 8517;

(c) all other parts are to be classified in heading 8409, 8431, 8448, 8466, 8473, 8503, 8522, 8529 or 8538 as appropriate or, failing that, in heading 8487 or 8548.

24. Rule 2 (a) of the Rules of Interpretation provides that a reference to an article shall include an incomplete and unfinished article provided it has the essential character of the finished article. Further, goods in unassembled and disassembled state should be classified as the assembled article. Thus, for example, if a car is imported but the wheels are yet not fitted, it is an incomplete car and has to be classified as a car only because it has the essential character of the car even though it cannot be used as such until it is completed by fixing the wheels. Similarly, if goods are imported in completely knocked down (CKD) condition or in semi-knocked down (SKD) condition, they are to be classified as that article even though they can be used only after they are fully assembled.

25. Rule of Interpretation 2(b) deals with mixtures. It states that reference to a substance shall include mixtures or combinations of that material or substance with other materials or substances. Any reference to goods of a given material or substance shall be taken to include a reference to goods consisting wholly or partly of such material or substance. The classification of goods consisting of more than one material or substance shall be according to the principles of rule 3. Goods such as chemicals and pharmaceuticals are often not 100% pure and are mixed with other substances. Despite the admixtures, they should be classified as the substance. If there is more than one substance in the imported goods and they are classifiable under separate headings, then Rule 3 resolves the conflict.

26. Rule 3 states that when by application of rule 2(b) or for any other reason, goods are, prima facie, classifiable under two or more headings, classification shall be effected as follows:

(a) The heading which provides the most specific description shall be preferred to headings providing a more general description. However, when two or more headings each refer to part only of the materials or substances contained in mixed or composite goods or to part only of the items in a set put up for retail sale, those headings are to be regarded as equally specific in relation to those goods, even if one of them gives a more complete or precise description of the goods.

(b) Mixtures, composite goods consisting of different materials or made up of different components, and goods put up in sets for retail sale, which cannot be classified by reference to (a), shall be classified as if they consisted of the material or component which gives them their essential character, in so far as this criterion is applicable.

(c) When goods cannot be classified by reference to (a) or (b), they shall be classified under the heading which occurs last in numerical order among those which equally merit consideration.

27. The other Rules of Interpretation are not relevant for the present case. The Commissioner has observed that in the literature produced by the appellant, the imported goods are described as the child parts of the spark plugs. The spark plugs have, within them, an electro-magnet of which the disputed goods viz., magnetic core is a part. Thus, the disputed goods are a child part of the spark plug. Revenue, therefore, views them as parts of the spark plugs. Spark plugs are classifiable under 8511 10 00 and therefore, their parts including the disputed goods are classifiable under 8511 90 00. According to the appellant, since the disputed goods form part of the electro-magnet which is part of the spark plug, they should be classified as such. Electromagnets are classifiable under 8505 11 and therefore, the disputed goods being their parts, should be classified under 8505 90 00. There are no Chapter Notes relevant to the dispute but Section note 2(a) of the relevant section states that parts which are goods included in any of the headings of Chapter 84 or 85 (other than headings 8409, 8431, 8448, 8466, 8473, 8487, 8503, 8522, 8529, 8538 and 8548) are in all cases to be classified in their respective headings. In this case, the disputed goods „magnetic core‟ are not goods in themselves under any of the headings. In fact, both the appellant and the Revenue classify them as parts only but under different headings. Section note 2(b) states that other parts, if suitable for use solely or principally with a particular kind of machine, or with a number of machines of the same heading (including a machine of heading 8479 or 8543) are to be classified with the machines of that kind or in heading 8409, 8431, 8448, 8466, 8473, 8503, 8522, 8529 or 8538 as appropriate. In this case, the disputed goods are child parts of the spark plugs and in our considered view, applying this rule, they should be correctly classified along with the spark plugs under 8511 which has a subheading for parts, viz., 85119000.

28. Although we find that Rule 1 of Interpretation read with Section Note 2 itself resolves the classification dispute, we have also examined some other Rules of interpretation to see if they would require a different view to be taken. Rule 2(a) is not relevant to this case as the imported goods are not an unfinished article but only a part. Rule 2(b) is also not relevant because the disputed goods are not mixture. Rule 3 deals with cases which cannot be resolved by applying Rule 2(b) or for any other reason and the goods are classifiable under more than one heading. Rule 3(a) states that specific entry should be preferred over a more general entry. Rule 3(b) deals with mixtures or composite articles which is not relevant to this case. Rule 3(c) states that if the classification cannot be done using either Rule 3(a) or 3(b), then the last entry in the tariff is the correct entry. Applying Rule 3 (a), we find that the disputed goods, being child part of spark plugs are a more specific description of part of electro-magnets. Further, applying Rule 3(c), the last of the competing entries would be the correct entry. Thus, viewing from any angle, we find that the disputed goods have been correctly classified in the impugned order under 8511 90 00 as parts of spark plugs.

29. Insofar as the alternative exemption under Notification No. 46/2011- Cus dated 1 June 2011 as amended by notification 82/2018-Cus dated 31 December 2018 (entry number 1335) claimed by the appellant is concerned, we find that this entry reads as follows:

Thus, this exemption is available unconditionally under the notification to all goods falling under 851190 imported from ASEAN countries and the disputed goods were imported from Thailand. Revenue classified the goods under 85119000 which we have found to be correct. Therefore, the appellant would be entitled to the benefit of this entry of the exemption notification. However, we find that the goods in this case were imported between 13.03.2018 and 06.03.2020. The exemption notification no. 46/2011 to goods imported from ASEAN has been amended from time to time. It needs to be examined with respect to each Bill of Entry if the exemption under this or any other entry was available to the disputed goods falling under 85119000. This exercise can be carried out best by the original authority and for this limited purpose, we find it necessary to remand the matter to the original authority.

30. We proceed to answer the questions which we framed in paragraph 8 above as follows:

(a) Revenue was correct in issuing the show cause notice under section 28 demanding differential duty without first appealing against the Bills of Entry which were self assessed.

(b) Revenue has clearly proposed change of classification of the imported goods as a part of the show cause notice.

(c) Commissioner (Audit) was competent to issue the show cause notice in the facts of this case.

(d) The imported goods classifiable under 85119000 as has been held in the impugned order.

(e) The appellant is prima facie, entitled to the benefit of under Sl. No. 1335 of Notification No. 46/2011-CUS dated 01.06.2011. However, considering the several amendments which may have been made to the notification during the period the 79 Bills of Entry were filed, we find it necessary to remand the matter to the original authority to determine the extent to which the exemption is available in respect of each.

31. The appeal is partly rejected by upholding the classification of the imported goods and partly allowed by allowing the benefit of notification no. 46/2011-cus (S.No. 1335). The impugned order is modified accordingly and matter is remanded to the original authority for re-determining the duty liability accordingly.

(Order pronounced in open court on 04/07/2022.)

(JUSTICE DILIP GUPTA)
PRESIDENT

(P.V. SUBBA RAO)
MEMBER (TECHNICAL)

Equivalent .