Ismartu India Pvt. Ltd Vs Principal Commissioner of Customs (Import) (CESTAT Delhi)
The appeal challenged an order of the Principal Commissioner of Customs reclassifying imported goods declared as parts of mobile phones into complete mobile phones under CTI 8517 14 00/8517 12 19, resulting in confirmation of differential customs duty, interest under Section 28AA of the Customs Act, 1962, penalty under Section 112(a)(ii), and confiscation of the goods.
The appellant maintained that the imported consignments consisted only of parts relating to different mobile phone models and were insufficient to manufacture complete mobile phones. It submitted that additional components, including batteries and other locally procured items, along with further manufacturing processes, were necessary before a mobile phone could be produced. Documents identifying the imported goods and locally purchased items were furnished during the investigation.
The department relied upon Rule 2(a) of the General Rules for Interpretation (GIR) of the Customs Tariff Act, 1975 and contended that the imported consignments constituted complete mobile phones in CKD/SKD condition. A Chartered Engineer examined the goods and reported that the imported items were parts received in disassembled or unassembled condition, forming an incomplete mobile phone. The report noted that essential components such as the battery and camera were absent and that software loading, testing, quality control, packaging and other processes were still required. A subsequent clarification further stated that communication functionality could not be determined without testing in an approved laboratory.
