2024(09)LCX0025

Alcove Construction Private Limited

Versus

Commissioner of Customs (Port)

Customs Appeal No. 76061 of 2023 decided on 12-09-2024

IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL
EASTERN ZONAL BENCH : KOLKATA

REGIONAL BENCH – COURT NO. 2

Customs Appeal No. 76061 of 2023

(Arising out of Order-in-Appeal No. KOL/CUS/PORT/KS/362/2023 dated 04.05.2023 passed by the Commissioner of Customs (Appeals), 3rd Floor, 15/1, Strand Road, Kolkata - 700 001)

M/s. Alcove Construction Private Limited                        : Appellant
68/2, Harish Mukherjee Road, Kolkata – 700 025

VERSUS

Commissioner of Customs (Port)                                    : Responden
15/1, Strand Road, Custom House, Kolkata – 700 001

APPEARANCE:

Shri Indranil Banerjee, Advocate
Assisted by Shri Subrata Mukherjee, Advocate
For the Appellant

Shri Faiz Ahmed, Authorized Representative
For the Respondent

CORAM:
HON’BLE SHRI R. MURALIDHAR, MEMBER (JUDICIAL)
HON’BLE SHRI K. ANPAZHAKAN, MEMBER (TECHNICAL)

FINAL ORDER NO. 76984 / 2024

DATE OF HEARING / DECISION: 12.09.2024

ORDER: [PER SHRI R. MURALIDHAR]

    The appellant have imported “Aluminium Formwork Structure with Accessories” under three Bills-of-Entry dated 24.05.2019, 28.05.2019 and 06.06.2019. They had claimed the benefit of exemption under Serial No. 610 of Notification No. 152/2009-Cus. dated 31.12.2009.

1.1. After more than one year, a Show Cause Notice was issued on the ground that the imported goods did not appear to be classifiable under Customs Tariff Heading 7610 90 10, but were required to be classified under the Heading of 8480 60 00 of the Customs Tariff Act. The Show Cause Notice inter alia proposed recovery of the short-levied Customs Duty of Rs.58,45,395/-.

1.2. After due process, the ld. adjudicating authority, vide Order-in-Original No. KOL/CUS/PORT/JC/19/SIB/2021 dated 28.04.2021 held that the imported goods were classifiable under Tariff Entry 8480 60 00 and also denied the benefit of the exemption Notification No. 152/2009-Cus. dated 31.12.2009 as claimed by the appellant, thereby re- quantifying the differential duty payable as Rs.87,68,095/-. He has also charged interest on the above confirmed demand and imposed a penalty of Rs.8,00,000/- under Section 112(a)(ii) of the Customs Act, 1962.

2. Being aggrieved, the appellant filed an appeal before the Ld. Commissioner (Appeals), who vide the impugned order has dismissed their appeal.

3. The Ld. Counsel appearing on behalf of the appellant submits that the Department has placed reliance on the definition of ‘Formwork’ as given in Wikipedia; no expert advice or opinion was sought to know the actual nature of the imported goods. He stated that the Revenue has taken the view that the goods in question will fall within the purview of ‘moulds’ as specified under Tariff Entry 8280 60 00 while, on the other hand, the appellant has basically imported Aluminium Formwork Structures which are actually used at various building sites on a customized basis. He contends that the same cannot be termed as a ‘mould’ since the form of the base structure changes as per the requirement of the customer / client; the entire formwork system is designed as a cost-effective shuttering and used to provide structure and support to brick walls, roofing, etc., in civil construction.

3.1. He points out that the Revenue has relied upon the Explanatory Notes to HSN annexed to Heading 7308.40, which in fact helps the stand taken by the appellant.

3.2. He also submits that the demand towards Customs Duty made directly under Section 28 of the Customs Act, 1962, without challenging the assessment of the Bills-of-Entry, is legally not tenable. In this regard, reliance was placed on the decision of this Tribunal in the case of Shri Rajib Saha v. Commissioner of Customs (Prev.), Shillong [Final Order Nos. 76465-76466 of 2023 dated 24.08.2023 in Customs Appeal No. 75278 of 2016 & anr. (CESTAT, Kolkata)].

3.3. He further takes a stand that the ld. adjudicating authority has traversed beyond the scope of the Show Cause Notice wherein although initially the demand was for Rs.58,45,395/-, a demand of Rs.87,68,095/- was confirmed, by way of the Order- in-Original, since the ld. adjudicating authority had denied the benefit of the exemption Notification to the appellant. He submits that though a cursory mention was made about the proposal to deny the benefit of the exemption Notification, no specific reason was given in the Show Cause Notice as to which condition of the Notification was not fulfilled by the appellant. Thus, it is his submission that the appellant was never given an opportunity to defend the issue raised by the Revenue. Therefore, he contended that the principles of natural justice were not followed in the instant case and on this count itself, the enhanced confirmed demand is required to be set aside.

3.4. He also submits copies of photographs taken towards the usage of Aluminium Formwork and brochures showing the drawing of such formwork. He submits that these will clarify that the same cannot be termed as ‘moulds’ and hence, the appellant has correctly classified the same under Heading 7610.

3.5 In view of the above submissions, the Ld. Counsel for the appellant prays that the present appeal may be allowed.

4. The Ld. Authorized Representative of the Revenue submits that when the Aluminium Formwork is taken as a whole, it is seen that they can work as a mould since concrete is poured inside. Thus, he submits that the job of a ‘mould’ is undertaken by the imported goods. He also submits that the appellant was put to notice in the Show Cause Notice about the proposal of the Department to deny the benefit of the exemption Notification.

4.1. In view of these submissions, he prays that the appeal filed by the appellant be dismissed.

5. Heard both sides, perused the appeal papers and other documentary evidence placed before us.

6. We find from the photographs enclosed by the appellant that these are moveable Formwork which can be used at various sections of the constructed area based on the requirement of the client. The basic content of the product is Aluminium.

7. From the Explanatory Notes under HSN (copy of which was provided by the appellant), we find that under 7308.40, “Equipment for scaffolding, shuttering, propping or pit-propping” are given, under Chapter 73, pertaining to structures of iron or steel. The Explanatory Notes to heading 76.10 state that the Explanatory Note to heading 73.08 apply, mutatis mutandis, to the heading under 76.10.

7.1. When both of these are read together, it would mean that when the goods viz., Aluminium structures in this case, are similar to equipment for scaffolding, shuttering, propping or pit-propping, the same would get classified under heading 76.10 only. Therefore, we hold that the appellant was correct in classifying the impugned goods under CTH 7610 90 10.

8. We also observe that this is a case where the Bills-of-Entry were self-assessed by the appellant. The Revenue has not challenged the assessment under these Bills-of-Entry, which they are required to do before they come up with their demand notice. This Tribunal in the case of Shri Rajib Saha v. Commissioner of Customs (Prev.), Shillong [Final Order Nos. 76465-76466 of 2023 dated 24.08.2023 in Customs Appeal No. 75278 of 2016 & anr. (CESTAT, Kolkata)] has held as under: -

“10. We observe that the self-assessment of the Bills of Entry by the importer was not challenged by the department. The Hon’ble Supreme Court in the case of ITC Ltd, has held as under:

47. When we consider the overall effect of the provisions prior to amendment and post- amendment under Finance Act, 2011, we are of the opinion that the claim for refund cannot be entertained unless the order of assessment or self-assessment is modified in accordance with law by taking recourse to the appropriate proceedings and it would not be within the ken of Section 27 to set aside the order of self-assessment and reassess the duty for making refund; and in case any person is aggrieved by any order which would include self- assessment, he has to get the order modified under Section 128 or under other relevant provisions of the Act.

11. We observe that the ratio of the above said decision is squarely applicable in this case. We find that the impugned order passed demanding differential duty without challenging the original assessment of the Bills of entry is not sustainable. Hence, the demand is not sustainable on this count also.”

8.1. We find that the ratio laid down the above Final Order passed by this Tribunal is squarely applicable to the facts of the present case. Therefore, even on this count, we set aside the impugned order and allow the appeal.

9. We also find force in the appellant’s submission that the ld. adjudicating authority and the lower appellate authority have traversed beyond the scope of the Show Cause Notice. Admittedly, though a proposal was made to deny the benefit of the Notification, the Show Cause Notice did not specify as to any condition which had not been fulfilled by the appellant so as to deny the benefit of the said Notification. In such a case, the appellant would not have had an opportunity to defend their case by submitting proper documentary evidence.

10. In view of the foregoing, we set aside the impugned order and allow the appeal with consequential relief, if any, as per law.

(Operative part of the order was pronounced in open court)

Sd/-           
(R. MURALIDHAR)  
MEMBER (JUDICIAL)

Sd/-           
(K. ANPAZHAKAN)    
MEMBER (TECHNICAL)