In re Dynamic Conglomerate Private Limited (CAAR Mumbai)
Dynamic Conglomerate Private Limited filed an application before the Customs Authority for Advance Rulings, Mumbai seeking a ruling on the classification of LED Monitor Kits proposed to be imported in an unassembled condition. The applicant, incorporated in 2019, engages in importing, manufacturing, and trading various computer hardware and peripherals. They now plan to import LED Monitor Kits consisting of multiple components that, when assembled, form complete LED monitors.
The components are imported in separate cartons, with items such as LED panels, gift boxes, and other parts shipped independently but in matching quantities. After import, the applicant carries out assembly in India using unskilled and semi-skilled workers, employing basic tools like screwdrivers and performing soldering on certain parts. Additional steps include quality control checks, burn testing, and final packaging. Assembly accounts for only 2–5% of the total cost, and nearly all components (99%) are imported, with local procurement accounting for less than 1%.
The assembled monitors are intended for direct connection to automatic data processing (ADP) machines and can be used for business and entertainment applications. The applicant contends that since all components of a monitor are imported and only assembled post-import without further processing, the goods should be classified as unassembled LED monitors under Tariff Item (CTI) 85285200. They rely on Rule 2(a) of the General Rules for Interpretation (GRI), relevant CBIC circulars, and HSN Explanatory Notes.
