Customs Appeal No. 11121 of 2018-DB

Decided On: 19.04.2024

Appellants: Apollo Tyres Limited Vs. Respondent: Commissioner of C., Mundra

Hon'ble Judges/Coram:
Ramesh Nair, Member (J) and Raju


Ramesh Nair, Member (J)

1. This appeal is directed against order-in-original MUN-CUSTM-000- COM-12-17-18 dated 24.01.2018 wherein the appellant challenged only imposition of penalties of Rs. 68,74,072/- imposed under Section 114A of the Customs Act, 1964 (sic 1962). The brief background of the case is that the appellant's factories are situated at Kerala, Gujarat and Tamil Nadu which engaged in the manufacture of Automotive Tyers. The present issue is with respect to the import of Shell Flavex Oil 595 B/H imported through Chennai and Nhava Sheva ports for use in its factory at Gujarat. The item being Plasticizer and was classified by all Custom Houses under CTH 38122090. However, with respect to such imports the DRI, Gandhidham after elaborate examination of chemical properties of the item came to the conclusion that it should be classified under CTH 27079900. The appellant without contesting the duty liability due to changed in the classification admittedly paid the duty of Rs. 68,74,072/- on 02.11.2015 and a small amount was paid on 04.01.2018, despite this payment was made, the DRI has issued the show cause notice dated 24.06.2016. The said show cause notice has been adjudicated wherein the duty along with interest was confirmed and the same was appropriated as the appellant have already paid the amount. In addition a penalty of Rs. 68,74,072/- was imposed under Section 114A of Customs Act, 1964. Being aggrieved by Order-In- Original appellant filed the present appeal only seeking the waiver of penalty.

2. Shri Joseph Kodianthara Learned Sr. Advocate with Ms. Shweta Garge Advocate appearing on behalf of the appellant submits that the issue involved is the classification of imported goods, the nature of the goods could be known only after detail testing and analysis of the goods. Therefore, chemical parameter of the product was not known to the appellant. Accordingly, in the matter of classification mala fide intention cannot be attributed to the appellant. Moreover, in all over India all the Commissionerates were classifying the said goods under CTH 38122090 as declared by the appellant therefore the correct classification could be arrived only after detailed analysis of the product. In this position, the appellant is not liable for penalty under Section 114A.

2.1. He further submits that the appellant without contesting the merit admittedly paid the duty before issuance of show cause notice and a small amount was paid subsequently, for this reason also penalty is not imposable. He placed reliance on the following judgment:-

• Commissioner of C.Ex, Chennai-II Vs. Hindustan Motors Ltd- MANU/TN/5360/2011 : 2012 (284) ELT 168 (Mad.)

• Commissioner of C. Ex. Mumbai-II Vs. Hindustan Petroleum Corporation Ltd. -MANU/MH/2959/2016 : 2017 (347) ELT 229 (Bom.)

• Commissioner of C. Ex. Delhi-III, Gurgaon Vs. Machino Montell (I) Ltd- MANU/CE/0259/2004 : 2004 (168) ELT 466 (Tri.-LB)

3. Shri A.K Samota Learned superintended (AR) appearing on behalf of the Revenue reiterates the finding of the impugned order.

4. On careful consideration of the submission made by both the sides and perusal of the record we find that the case relates to classification of the imported goods, the appellant have classified the goods under CTH 38122090 on a bona fide belief that the imported goods were Plasticizer and the same were used as Plasticizer in the manufacture of the tyre. The compound Plasticizer is clearly mentioned in the tariff entry against CTH 38122090. Therefore, the bona fide belief of the appellant that the product b........