IZI Vs Commissioner of Customs (CESTAT Mumbai)
The case concerns rejection of a request for provisional release of drones and their components seized from the appellants’ premises. The appellants had imported goods declared as “drone parts and components” through multiple Bills of Entry. Upon examination, Customs authorities alleged that the imports constituted complete drones in completely knocked-down (CKD) or semi-knocked-down (SKD) condition, which is restricted under DGFT Notification No. 54/2015-20. The goods were seized, and the Commissioner denied provisional release, leading to the present appeal.
The appellants argued that the components were imported across multiple consignments without one-to-one correlation and could not be treated as complete drones. They contended that application of Rule 2(a) of the General Rules for Interpretation of the Customs Tariff to treat parts as complete articles was not applicable to Foreign Trade Policy matters. They further submitted that they were recognized drone manufacturers, importing components and undertaking activities such as testing, calibration, and assembly, along with using domestically procured parts.
The Tribunal examined the Commissioner’s reasoning, including reliance on the Chartered Engineer’s report and the view that imported components collectively formed complete drones. It noted inconsistencies in the evidence, including lack of clarity on whether all components were considered together, uneven quantities of imported items, and absence of one-to-one correlation necessary to establish CKD/SKD imports. The Tribunal also observed that components were imported through multiple Bills of Entry and not as a single consignment capable of being assembled into complete drones.
