In re Niko Tools (CAAR Mumbai)
In a significant ruling, the Customs Authority for Advance Rulings (CAAR), Mumbai, has held that anti-dumping duty (ADD) under Notification No. 15/2023-Customs (ADD) dated 22 December 2023 is not applicable to imported laser sources, as these constitute only components and not complete laser machines. The application was filed by M/s Niko Tools, a Bengaluru-based manufacturer and trader of laser machinery and parts.
Background of the Case
M/s Niko Tools approached CAAR seeking clarity on whether imports of laser sources would attract anti-dumping duty as per the referenced notification, which imposes ADD on fully assembled, semi-knocked down (SKD), or completely knocked down (CKD) industrial laser machines. The applicant argued that the laser source, being only a part of the entire machine, could not independently perform cutting, welding, or marking functions, and thus should not fall within the purview of the notification.
Applicant’s Submissions
The applicant detailed that laser sources were imported for use in manufacturing laser cutting, marking, and welding machines. They emphasized that a laser source alone cannot perform any function without integration into a larger system that includes chillers, power supplies, gantries, optics, CNC controllers, sensors, and various mechanical and electronic subsystems. Thus, they argued, these components do not represent a complete machine at the time of import.
Further, the applicant cited CAAR’s own decision in In re: Aditya Automation (CAAR/Mum/ARC/142/2024), where it was held that anti-dumping duty applies only to fully assembled industrial laser machines or those in SKD/CKD form, not to individual parts like laser sources.
The applicant also referred to DGTR’s Final Findings dated 27 September 2023, which confirmed that industrial laser machines include numerous integrated components, and that ADD was intended only for fully assembled systems capable of immediate use.
Supporting evidence included CE certificates, a Chartered Engineer’s certificate, comparative cost analysis, and photographs showing the standalone nature of the laser sources and their role as components in larger assemblies.
They clarified that laser sources are imported individually or with unrelated machinery and not as part of any CKD or SKD set. Moreover, these sources undergo extensive engineering, integration, and testing at their Bangalore facility before they can function as complete laser machines.
Key Legal Arguments
