Case Law Details
Sennheiser Electronics India Pvt Ltd Vs Principal Commissioner (CESTAT Delhi)
In a significant ruling, the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) Delhi allowed customs duty exemption for imported earphones in the case of Sennheiser Electronics India Pvt Ltd vs. Principal Commissioner. The appellant imported two models of earphones and claimed duty exemption under exemption Notification No. 57/2017-Cus dated 30.06.2017 as amended by Notification No. 22/2018-Cus dated 02.02.2018, which was contested by the customs authorities.
The dispute centered on whether the imported earphones, specifically the CX 275s model with an in-built microphone, qualified as “parts of cellular mobile phones” and “wired headsets” under the exemption notification. The customs authorities argued that the earphones were excluded from the exemption due to being wired headsets.
However, CESTAT Delhi rejected this argument, stating that earphones are standalone products and not integral parts of cellular mobile phones. The tribunal emphasized that earphones add additional utility to various electronic devices, including mobile phones, but are not essential for their functioning. Consequently, the earphones were classified as accessories, making them eligible for the customs duty exemption.
The ruling by CESTAT Delhi provides clarity on the classification of imported earphones and their eligibility for customs duty exemption. Importers of earphones, such as the appellant in this case, can now benefit from the exemption notification, which will have significant implications for the industry.
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