P V SUBBA RAO

1.M/s. Magic Mike Enterprises Pvt Ltd. 1, The appellantfiled this appeal to assail the order dated 23.6.2025 2, Impugned order passed by the Principal Commissioner confirming the proposals in the show cause notice dated 11.7.2023 3, SCN and confirmed demand Rs. 1,14,40,850/- as customs duty under section 28 of the Customs Act, 1962 4, 4. Act with interest to be paid on the four Bills of Entry filed by the appellant in July 2022 along with interest and imposed an equal amount as penalty under section 114A of the Act.

2. We have heard both sides and perused the records.

3. The appellant imported printed circuit board assembly (PCBA) for Router 1 GE (parts of networking product) through air cargo complex, New Delhi and filed four Bills of Entry in which it classified them under Customs Tariff Item⁵ 8517 79 10 and claimed the benefit of exemption Notification No. 24/2005-Cus dated 1.3.2005 (S. No. 13S). All four Bills of Entry were cleared on self-assessment.

4. Later, on scrutiny of these Bills, it was felt that the appellant had wrongly availed the benefit of the exemption notification for the reason that the imported goods were among the PCBAs which were excluded from entry no. 13S being ‘combination of one or more Packet Optical Transport Product or Switch (POTP or POTS)’ and were however, covered by entry no. 22 of the same notification which attracted 10% duty.

5. Accordingly, the SCN was issued demanding recovery of differential duty with interest and penalty.

6. The appellant contested the demand asserting that the imported goods were not POTP or POTS and hence, they were not excluded by S. No. 13S of the notification. The Commissioner agreed with this submission but found that the appellant had not fulfilled the condition to avail the benefit of the exemption notification (S.No. 13S) and for that reason, denied the benefit of this entry and confirmed the demand with interest and imposed an amount equal to the differential duty as penalty.

7. Shri Dosi, learned counsel made the following two submissions:
a) In the impugned order, the Commissioner travelled beyond the SCN. While the SCN proposed to deny the benefit of the exemption at S. No. 13S on the ground that the goods were excluded from the entry, the Commissioner denied the benefit of the exemption on the ground that the appellant had not fulfilled the condition. Therefore the impugned order cannot be sustained.
b) The reason for the appellant not fulfilling the condition laid down in the notification is that in the book which the appellant referred, the publisher had wrongly not entered the condition. Therefore, there was a reasonable cause for failure.

8. Shri Rajesh Singh, learned authorised representative for the Revenue, on the other hand, vehemently supported the impugned order. He pointed to the table in page 3 of the SCN which clearly reproduced entry 13 S of the notification including the condition therein. He, however, submitted that since the SCN contended that the appellant’s goods did not fall under this entry at all, the question of asking if the appellant had fulfilled the conditions in the entry did not arise.

9. When the appellant submitted its defence that the goods fell under this entry of the notification, the Commissioner examined and accepted the submissions. Therefore, it became essential to examine if the appellant had fulfilled the conditions of the exemption also which were not only in the notification but were also reproduced in the SCN. The appellant had, however, put up defence only to the extent that the goods fell under the entry but did not put up any evidence to show that it fulfilled the condition of the notification. Therefore, the Commissioner has not at all travelled beyond the SCN.

10. He also vehemently argued that the appellant cannot take the defence that since some popular private publisher whose book the appellant had referred did not print the condition, it cannot be a ground for not fulfilling the condition.

11. He prayed