Dismissed

M/s. Aveco Technologies (Pvt.) Ltd., Rep. by its M.D., v. Union of India, rep. by its Secretary, Department of

Telangana HC17 Feb 2017WP/5712/2017

Case brief

AI extract

What is this about?

This order dismissed a writ petition challenging a show cause notice issued regarding the misclassification of imported projectors for customs duty exemption. The Court declined to interfere, holding that the case did not fall within exceptions to the restraint on reviewing show cause notices.

What did the court decide?

The writ petition was dismissed. The third respondent was directed to fix a date for personal hearing and pass final orders within four weeks.

M/s. Aveco Technologies (Pvt.) Ltd., Rep. by its M.D… — Customs and Excise | Telangana HC (2017)

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THE HON’BLE SRI JUSTICE V. RAMASUBRAMANIAN and THE HON’BLE SMT JUSTICE J. UMA DEVI

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WRIT PETITION No.5712 of 2017

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ORDER: (per VRS, J)

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The petitioner has come up with the present writ petition challenging a show cause notice issued by the Additional Director General of Revenue (Intelligence).

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Heard Mr. V. Gopalakrishna Gokhaley, learned counsel for the petitioner.

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Mr. B. Narasimha Sarma, learned Senior Standing Counsel

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takes notice for the respondent.

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As repeatedly pointed out by the Supreme Court, the

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normal rule is one of restraint, whenever a challenge is made to a show cause notice. It is only in exceptional cases that show cause notices can be interfered with under Article 226. Therefore, let us

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see whether the case on hand falls within the exceptions.

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The contention of Mr. V. Gopalakrishna Gokhaley, learned counsel for the petitioner is that in respect of projectors imported by the very same petitioner, along with certain accessories, the issue has attained finality with a judgment of CESTAT and also

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VRS, J & JUD, J W.P.No.5712 of 2017

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the issue being settled by the Supreme Court. In Commissioner v. Aveco Viscomm Pvt. Ltd¹ , which was followed in Commissioner of Customs v. Vardhaman Technology P. Ltd² , the Tribunal held that projectors having additional features cannot fall under a different classification. Therefore, the learned counsel for the petitioner contended that the show cause notice is completely contrary to the law laid down in the assessee’s own case by the Tribunal and in similar cases by the Supreme Court.

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We have carefully considered the above submissions. Two paragraphs contained in the show cause notice are of relevance, to test the veracity of the above contention. Paragraphs 10 and 17 of the impugned show cause notice read as follows:

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“From the foregoing, it appears that the importer has imported different models of projectors of Hitachi and other brands which are capable of being used equally with various input devices, by misclassifying them under Tariff Item 85286100 instead of under Tariff Item 85286900, in order to avoid paying the appropriate duties of customs by wrongly claiming benefit of exemption Notification No.24/2005-Cus dated 01.03.2015. The brochures/catalogues and the manufacturers’ websites clearly establish the fact that the projectors imported by the importer are multiport projectors capable of being used equally with various media and not of the kind solely or principally used with ADP system as declared by them and therefore it appears that these projectors appropriately merit classification under Tariff Item 85286900.

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1 2011(263) E.L.T. 420 (Tribunal)

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2 2014(301) E.L.T. 427 (Tri. – Mumbai)

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VRS, J & JUD, J W.P.No.5712 of 2017

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From the foregoing, it appears that the importer all along has been wrongly claiming the different brands of projectors imported by them as those which are principally used with ADPS and thus wrongly availing the exemption from BCD. The importer has been suppressing to the department about the actual features of the projectors imported by them and misrepresenting them as similar to ones covered by an earlier order in their favour. The importer has deliberately mis-classified the projectors imported by them under the Tariff Item 85286100 and thereby evaded payment of appropriate duties of customs. The importer has willfully and fraudulently declared the improper classification of Tariff Item 85286100 for the projectors imported by them in order to claim the BCD exemption as available under Notification No.24/2005 dated 01.03.2005. The fact of improper Tariff classification of the projectors imported has been suppressed by the importer and the same has come to light only upon investigation by the department and detailed inquiry from other importers and manufacturers. Hence, it appears to be a fit case to invoke Section 28(4) of the Customs Act, 1962 for demanding the duties for the extended period.”

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From the above, it is clear that according to the

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Department, there has been a misclassification which came to light only upon a raid being conducted. In such cases, irrespective of the contentions raised on merits, it would always be better to allow the Department to consider all the objections and to pass final orders. As repeatedly pointed out by the Courts, the maximum damage that can be done to an assessee if a writ petition challenging a show cause notice is dismissed is to make

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VRS, J & JUD, J W.P.No.5712 of 2017

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him suffer an order of adjudication or assessment. The order of adjudication or assessment does not attain finality, as it is open to challenge in several avenues. Therefore, we are not convinced that this case falls under one of the exceptions to interfere with the show cause notice.

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Therefore, the writ petition is dismissed. However, the third respondent shall fix a date for personal hearing and pass final orders within a period of four weeks so that the other imports of the petitioner do not hang in suspense.

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Pending miscellaneous petitions, if any, shall stand closed. No order as to costs.

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___________________________

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V. RAMASUBRAMANIAN, J 17^th FEBRUARY, 2017.

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________________

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kvni

M/s. Aveco Technologies (Pvt.) Ltd., Rep. by its M.D., v. Union of India, rep. by its Secretary, Department of

Case brief

What is this about?

What did the court decide?

M/s. Aveco Technologies (Pvt.) Ltd., Rep. by its M.D., v. Union of India, rep. by its Secretary, Department of

Case brief

What is this about?

What did the court decide?

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