No Exporter Has Obligation To Either Anticipate Or Conform To Views Of DRI In Classifying Goods In Shipping Bills: CESTAT
The New Delhi Bench of Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has stated that no exporter has an obligation to either anticipate or to conform to views of DRI in classifying goods in shipping bills. The Bench of Justice Dilip Gupta (President) and P.V. Subba Rao (Technical) has observed that, “no exporter has any obligation to anticipate any views of DRI, audit...
The New Delhi Bench of Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has stated that no exporter has an obligation to either anticipate or to conform to views of DRI in classifying goods in shipping bills.
The Bench of Justice Dilip Gupta (President) and P.V. Subba Rao (Technical) has observed that, “no exporter has any obligation to anticipate any views of DRI, audit or preventive officers regarding the classification of the goods or to conform to them. The exporter fulfils his obligation once he files the Shipping Bills classifying goods as per his understanding.”
In this case, the Principal Additional Director General of DRI issued the SCN without any authority of law to reassess the Shipping Bills where the goods have already been exported. The Principal Additional Director General of DRI rejected the Reject the declared classification of Engineered Quartz Stone.
Aggrieved by the decision of Principal Additional Director General of DRI, the assessee filed an Appeal before Commissioner (Appeals), who rejected the appeal and upheld the order of the Assistant Commissioner. The assessee has challenged the order passed by the Commissioner (Appeals) before the Tribunal.
It was contended by the appellant/department that the classification of the goods in the Shipping Bill was not correct. Classification of goods is a matter of opinion, and it is part of the assessment. The exporter may classify the goods under a CTI, the proper officer may change it to a different CTI and if an appeal is filed, the CTI may be changed at any stage of appeal
Whereas it was contended by the respondent/assessee contended that the Shipping Bills were filed and the goods were allowed to be exported and their assessment was final which cannot be re-opened by issuing a Show Cause Notice alleging misclassification. Further, classification of the goods according to the assessee, as per the licence issued by the Development Commissioner and the Central Excise officers who cleared the goods is the same and it was indicated in the Shipping Bills.
The Tribunal observed that the declaration in the Shipping Bill was as per the understanding of the exporter and consistent with the views of the Development Commissioner, the Assistant Commissioner who issued the Sanction Order for the EOU and the Central Excise Officers who signed/retained the ARE 1& ER-2 Form.
The Tribunal pointed out that if the goods are exported, if DRI or Audit or Preventive or some other officer takes a different view of the classification of the goods, such views do not make the goods liable to confiscation. Otherwise, it would lead to complete anarchy.
The Tribunal stated that, if DRI takes a different view about the classification, it does not render the goods liable to confiscation. The exporter's responsibility ends with filing the shipping bill classifying the goods as per his understanding. If the proper officer changes the classification in re-assessment, his view will prevail it being part of re-assessment.
“The declaration in the Shipping Bills does not become false or incorrect simply because DRI takes a different view of the classification. No exporter has an obligation to conform to any future views of any officer of DRI, Audit, Preventive, etc”, added the Bench.
In view of the above, the Tribunal allowed the appeal.
Counsel for Appellant/ Department: Rakesh Kumar
Counsel for Respondent/ Assessee: C.M. Sharma
Case Title: Commissioner, Customs (Preventive)-Jaipur v. M/S Pelican Quartz Stone
Case Number: Customs Appeal No. 50196 OF 2025