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Dated: 03.02.2025

CESTAT Hyderabad set aside the reclassification insisted by Revenue due to lack of evidence and assessment not challenged at the time of import

CESTAT Hyderabad, ruled in favor of Vijay Nirman Company Pvt Ltd in a customs classification dispute. The case involved the reclassification of Aluminium Formwork Materials (AFM) imported from South Korea, initially cleared under CTH 76109090 (Aluminium Structures) but later reclassified by customs authorities under CTH 84806000 (Moulds for Mineral Materials), resulting in denial of duty exemption under Notification No. 152/2009-CUS.

Key Highlights of the Proceedings:

1. Case Overview:

• Appellant: Vijay Nirman Company Pvt Ltd, Visakhapatnam.
• Respondent: Principal Commissioner of Customs, Visakhapatnam.
• Issue: Reclassification of imported Aluminium Formwork Materials (AFM) and denial of customs duty exemption under Notification No. 152/2009-CUS.

2. Department’s Allegations:

• Customs originally classified AFM under CTH 76109090 (Aluminium structures).
• The Directorate of Revenue Intelligence (DRI) issued a Show Cause Notice (SCN), alleging misclassification.
• The Adjudicating Authority reclassified the goods under CTH 84806000 (Moulds for mineral materials), which attracted a higher customs duty and denied exemption benefits.

3. Key Arguments by the Appellant:

• AFM is not a mould but a temporary aluminium shuttering structure used in construction.
• Unlike a mould, AFM is reusable, movable, and does not create repetitive products.
• AFM fits within the definition of “aluminium structures” under CTH 7610.
• Reference to case law (Alcove Construction Pvt Ltd vs CC, Kolkata, 2024), which held similar goods under CTH 76109010.
• Denial of exemption notification was beyond the scope of the SCN and lacked specific reasoning.

4. Observations by the Tribunal:

• Formwork differs from moulds: Moulds are used for mass-producing predefined shapes, while formwork is a support structure for shaping and holding concrete during construction.
• AFM does not create final products like moulds do.
• The tribunal relied on past rulings that confirmed AFM classification under CTH 7610.
• Lack of expert opinion or concrete evidence from the department to support the reclassification under CTH 84806000.
• Bill of Entry assessment was not challenged by the Revenue, making the demand unsustainable.

5. Final Decision & Outcome:

• Tribunal ruled in favor of the appellant: AFM is classifiable under CTH 76109090.
• The appellant is entitled to exemption under Notification No. 152/2009-CUS.
• Department’s order was set aside, and the appeal was allowed with consequential relief.
• The issue of extended period and penalty was left open, as the appeal succeeded on merit.

Conclusion: This ruling underscores the importance of proper classification in customs disputes, particularly in cases involving specialized construction materials like Aluminium Formwork. It also highlights the need for clear reasoning in customs notifications and fair adjudication procedures.

This Article is Authored by: Mr. Ravi Shekhar Jha, BALLB/Mob: +91-9999005379 & his email id is intelconsul@gmail.com

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Source: CESTAT Hyderabad

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