2003(08)LCX0170

IN THE CESTAT, NORTHERN BENCH, NEW DELHI

Justice K.K. Usha, President and Shri C.N.B. Nair, Member (T)

COMMISSIONER OF CUSTOMS, JAIPUR

Versus

SUNNY IMPORTS PVT. LTD.

Final Order No. 450/2003-NB(A) and Stay Order No. 313/2003-NB(A), dated 25-8-2003 in Appeal No. C/282/2003-NB(A)

REPRESENTED BY :        Shri Jagdish Singh, SDR, for the Appellant.

Shri Vikash, for the Respondent.

[Order per : Justice K.K. Usha, President]. - This is an appeal by the Revenue challenging the order passed by the Commissioner (Appeals), Customs and Central Excise, Jaipur-I, dated 25-4-2003. The issue relates to classification of the goods imported by the Respondent.

2. M/s. Sunny Imports Private Ltd., Jaipur imported a consignment of sawn wood declaring it as “roughly squared Ghana Teak Logs 1770 pcs.” and sought clearance under Customs Tariff Heading 4403.49 at the rate of 5% basic customs duty and 4% SAD. On examination of the goods in the presence of authorised representative of the importer Shri Vikram Mohatta, the customs authorities took the view that that the goods are sawn wood classifiable under CTH 4407.29 with duty liability at the rate of 25% basic customs duty plus 4% SAD. Value of the goods was enhanced by US$ 50 per cubic metre (Cbm) on the basis of past imports of the same importer. Change in classification and enhancement of value resulted in a differential duty liability of Rs. 1,21,927/-. The importer waived show cause notice and requested for personal hearing. The adjudicating authority under order, dated 24-11-2002 confirmed the loading of value by US$ 50 per Cbm. Goods were classified under Heading 4407.29. Redemption fine of Rs. 1,25,000/- and penalty of Rs. 75,000/- were imposed. Aggrieved by the above order the importer filed an appeal before the Commissioner (Appeals).

3. Under order dated 25-4-2003 the Commissioner (Appeals) upheld the enhancement of the value but classified the goods under Customs Tariff Heading 4403.49 and reduced the redemption fine to Rs. 40,000/- and penalty to Rs. 10,000/-. Aggrieved by the above order, the Revenue has come up in appeal. It is contended on behalf of the Revenue that the Commissioner (Appeals) has failed to note that the importer vide his letter, dated 15-11-2002 had accepted the physical verification that the imported goods are sawn wood. The Commissioner (Appeals) observed that the importer had agreed only for loading the value and not for change of classification. He also observed that similar goods imported by the appellant on 9-8-2002 were classified under CTH 4403.49 and the Department had not changed the classification. The contention raised by the appellant is that the Commissioner (Appeals) has not considered the full text of the letter, dated 15-11-2002. It is also submitted that merely because on an earlier occasion the goods were wrongly classified it will not stand in the way of the customs authorities bringing it under proper classification at a subsequent stage. We find merit in the contention raised by the appellant. The letter, dated 15-11-2002 reads as follows :

“I, Vikram Mohatta authorised person of M/s. Sunny Imports Pvt. Ltd. for handling import shipment at ICD Kanakpura, visited ICI Kanakpura today.

Thanking you,

Beneath the above there is a note signed by the Director Shri Vikas Mohatta which reads as follows :

“We don’t want any SCN, but request for personal hearing. To speed up the process of clearance we hereby accept the loading of the value loaded @ 50 US$ per Cbm.”

On behalf of the respondent it was submitted before us that Vikram Mohatta was not authorised to agree for the classification of the goods as ‘sawn wood’. We cannot accept this contention for two reasons firstly, Vikram Mohatta was the authorised person of the importer and secondly if Vikram Mohatta had not been authorised to make such a statement the Director, who had signed in the endorsement made on 20-11-2002 would have pointed out the same. We therefore hold that the Commissioner (Appeals) has erred in coming to the conclusion that the importer had not agreed for the classification of the goods as sawn wood. Even at the time of the hearing no such objection was raised by the importer. On merits also we find that the classification was correctly made. The fact that on an earlier occasion the goods were wrongly classified is no reason to continue the mistake. We therefore set aside the order passed by the Commissioner (Appeals) to the extent we have held that the goods imported are liable to be classified under CTH 4403.49. We restore the finding of the original authority regarding classification of the goods under CTH 4407.29. But in the facts and circumstances of the case we do not think it is necessary for us as to interfere with that portion of the order passed by the Commissioner where he has reduced the redemption fine and penalty. Therefore the imposition of redemption fine at Rs. 40,000/- and penalty at Rs. 10,000/- are confirmed. The appellant will be liable to pay differential duty on the basis of classification of the goods under 4407.29 as claimed in this appeal. The appeal stands partly allowed as above.

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Equivalent 2003 (158) ELT 0721 (Tri. - Del.)