No custom duty benefit on Main PCB, Lightning Protector, DC/AC Cables, Fuse Holders of IFWT

ACD Communication Pvt. Ltd. Vs Commissioner of Customs (Port-Import) (CESTAT Chennai)

Conclusion: The goods imported such as main PCB, lightning protector, DC/AC cables, fuse holders are neither parts nor accessories of Integrated Fixed Wireless Telephones ( IFWT )could not be considered as accessory as these parts were not used to increase the effectiveness or convenience of IFWT. Therefore, the goods imported were neither parts nor accessories of IFWT and therefore could not avail the benefit of notification for Customs duty exemption.

Held: Assessee-company imported and cleared goods declared as “12V SMPS consisting of Main PCB, lightening protector, DC/AC cables, fuse/fuse holders and others” vide Bill of Entry. At the stage of scrutiny in the Post Clearance Audit (PCA), it was noticed that the goods had been classified under CTH 85299090 as parts of IFWTs operating on cellular technology and claiming the benefit of Customs Notification No.21/2005-Cus. dt. 1.3.2005 and Notification No.6/2006-CE dt. 1.3.2006 at ‘Nil’ rate of duty. As per Notification No.21/2005-Cus. dt. 1.3.2005, parts, components and accessories of mobile handsets including cellular phones were exempted from Customs duty. The Department was of the view that the imported goods were nothing but parts of the Switch Mode Power System (SMPS) classifiable under CTH 85049090. Show cause notice was issued proposing to reclassify the goods under Section 85049090 and for demanding the differential duty along with interest. It was held that the goods imported were parts of SMPS. SMPS (Switch Mode Power System ) was not a part of IFWT. The goods imported could not be considered as accessory as these parts were not used to increase the effectiveness or convenience of IFWT. Therefore, the goods imported were neither parts nor accessories of IFWT and therefore could not avail the benefit of notification.

FULL TEXT OF THE CESTAT CHENNAI ORDER

Brief facts of the case are that appellant M/s.ACD Communications Pvt. Ltd. imported and cleared goods declared as “12V SMPS consisting of Main PCB, lightening protector, DC/AC cables, fuse/fuse holders and others” vide Bill of Entry dated 03.03.2007. The goods were sold on High Sea Sale basis by ICOMM Tele Ltd. to the appellant herein. At the stage of scrutiny in the Post Clearance Audit (PCA), it was noticed that the goods had been classified under CTH 85299090 as parts of IFWTs operating on cellular technology and claiming benefit of Customs Notification No.21/2005-Cus. dt. 1.3.2005 and Notification No.6/2006-CE dt. 1.3.2006 at ‘Nil’ rate of duty. As per Notification No.21/2005-Cus. dt. 1.3.2005, parts, components and accessories of mobile handsets including cellular phones are exempted from Customs duty. The Department was of the view that the imported goods are nothing but parts of Switch Mode Power System (SMPS) classifiable under CTH 85049090 which is a specific tariff heading for parts of electrical transformers, converters, inverters, uninterrupted power supply system (UPS), voltage stabilizers, regulators and inductors. The imported goods did not appear to be complete unit of SMPS. Batteries, metal casting etc. was required to make a complete unit of SMPS. In Notification No.25/2005-Cus. dt. 01.03.2005, the entry under CTH 85299090 against Sl.No.16 refers to ‘Parts’. Again in respect of Central Excise Notification No.6/2006-CE dt. 1.3.2006, the entry under Chapter 85 or any other Chapter against Sl.No.31 refers to “Parts, components and accessories of mobile handsets including cellular phones”. It appeared that the goods imported are parts of “Switch Mode Power System (SMPS)” and not “parts of mobile handsets and cellular phones/fixed wireless phones. Show cause notice was issued proposing to reclassify the goods under Section 85049090 and for demanding the differential duty along with interest. After due process of law, the original authority determined the goods to be classified under CTH 85049090 and thereby denied benefit of Customs Notification No.21/2005-Cus. dt. 1.3.2005 and Central Excise Notification No.6/2006-CE dt. 1.3.2006. The proposal for demand of differential duty of Rs.55,87,185/- was confirmed. The appellant filed appeal against the said order and vide impugned order herein, the Commissioner (Appeals) upheld the same. Hence this appeal.

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