2018 (3) TMI 1845 - AT - Customs

Import of hardware components for P10 mm LED display - restricted item or not - requirement of mandatory BIS (Bureau of Indian Standards) Certificate, not produced - HELD THAT - The import of industrial PCs requires certificates of Bureau of Indian Standards an essential and mandatory pre-requisite for clearance into the domestic market - Though it is the claim of the appellant that the components being classifiable as the system, is not subject to the restriction, it is clear that such classification is undertaken to determine rate of duty for levy under Customs Act, 1962, and the impugned goods are accordingly treated as the system of which it is a component. Lack of such certificate is admitted by the appellant despite which clearance into the domestic market is sought upon redemption on payment of fine in lieu of confiscation. The goods were ordered to be re-exported because of non-compliance with certification requirements. Many restrictions, especially those that are quantitative under the Foreign Trade Policy, may be overcome with redemption of goods on payment of fine. However, certificate of Bureau of Indian Standards is intended to protect the residents of the country from consequences affecting life and limb and to ensure quality standards - Any deviation therefrom cannot be treated lightly. The refusal to admit the impugned goods into the country cannot also be faulted. Appeal dismissed.

Issues:
1. Import of 'industrial PCs' without mandatory BIS Certificate.
2. Classification of components as part of a system.
3. Confiscation and penalty imposition for non-compliance.
4. Redemption on payment of fine in lieu of confiscation.
5. Refusal to admit goods into the country.

Analysis:
1. The appellant imported 'industrial PCs' without the mandatory Bureau of Indian Standards (BIS) Certificate, contravening the Electronics Information Technology Goods Order. The lower authorities upheld the violation, emphasizing the necessity of the BIS Certificate for clearance. The appellant argued that the goods, as components of a system, should not be restricted unless the entire system is restricted, citing relevant tribunal decisions.

2. The Tribunal considered the appellant's classification argument in line with previous decisions but clarified that such classification determines duty levy under the Customs Act, 1962, not non-tariff restrictions. The judgment distinguished between duty levy objectives and restriction objectives, asserting that the decisions cited by the appellant do not support their case. Consequently, the impugned goods were treated as part of the system and subject to the BIS Certificate requirement.

3. Despite admitting the lack of the BIS Certificate, the appellant sought clearance by paying a fine in place of confiscation. However, the Tribunal emphasized the importance of the BIS Certificate in ensuring quality standards and safety for residents. The refusal to admit the goods into the country was upheld, highlighting the seriousness of non-compliance with certification requirements.

4. The Tribunal noted that while some restrictions can be overcome through redemption on payment of fines, the BIS Certificate requirement serves a critical purpose in safeguarding quality and safety standards. The judgment affirmed the decision for re-exportation due to non-compliance, underscoring the significance of adhering to certification regulations to protect consumers and maintain quality standards.

5. In conclusion, the Tribunal found no merit in the appeal and dismissed it, emphasizing the importance of complying with certification requirements to ensure the safety and quality of imported goods. The judgment highlighted the distinct objectives of duty levy and non-tariff restrictions, reiterating the significance of upholding certification standards for the protection of consumers and the country's residents.

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