2008 (9) TMI 668 - AT - Customs

Summary

Issues Involved:
1. Imposition of anti-dumping duty on imported Compact Fluorescent Lamps (CFL) in semi-knocked down (SKD) condition.
2. Classification of imported goods under Customs Tariff Act.
3. Applicability of Rule 2(a) of General Rules for Interpretation.
4. Validity of penalties imposed u/s 114(A) of Customs Act.

Summary:

1. Imposition of Anti-Dumping Duty on Imported CFLs in SKD Condition:
The appellants, M/s. Samay Electronics Pvt. Ltd. (SEPL), were importing CFLs from China in SKD condition and declaring them as components to evade anti-dumping duty under Customs Notification No. 18/2002-Cus. The Commissioner demanded duty of Rs. 76,97,68,897/- and imposed equivalent penalties on SEPL and its director, Shri Rameshbhai B. Patel. The investigation revealed that SEPL imported glass tubes with base and holders with wire/populated PCB from China, which together constituted CFLs in SKD condition, classifiable under CTH No. 859110, attracting anti-dumping duty.

2. Classification of Imported Goods under Customs Tariff Act:
The appellants argued that the anti-dumping duty was not applicable to CFLs in SKD condition as per the initial notifications, which referred to complete CFLs. They cited subsequent notifications and clarifications indicating that anti-dumping duty was intended for ready-to-use CFLs, not parts. The Tribunal noted that the goods were not ready-to-use CFLs as they required assembly, soldering, and testing.

3. Applicability of Rule 2(a) of General Rules for Interpretation:
The appellants contended that Rule 2(a) of the General Rules for Interpretation does not apply to notifications under anti-dumping duty. They referred to several Tribunal and Supreme Court decisions supporting this view, including Anchor Daewoo Industries Ltd. v. CC, Kandla and Sony India Ltd. The Tribunal agreed, stating that goods should be assessed in the form they are presented and that Rule 2(a) cannot be applied selectively.

4. Validity of Penalties Imposed u/s 114(A) of Customs Act:
The Tribunal found that the appellants' case was supported by previous decisions where anti-dumping duty was not imposed on parts of CFLs. Given the elaborate assembly process and the fact that the goods were not ready-to-use CFLs, the Tribunal granted a complete waiver of pre-deposit of duty and penalties, staying recovery until the appeal's disposal. The matter was set for an early hearing due to the significant revenue involved.

Conclusion:
The Tribunal ruled in favor of the appellants, waiving the pre-deposit of duty and penalties and staying recovery until the final hearing, scheduled for 18th November 2008. The decision emphasized that the goods were not ready-to-use CFLs and that Rule 2(a) of the General Rules for Interpretation does not apply to anti-dumping duty notifications.