2016 (5) TMI 914 - AT - Customs

Classification - LED panel or LED Television - Import of goods having essential characteristics of Television in terms of Rule 2(a) of the General Rules of Interpretation of the Customs Tariff Act - Held that - the examination report and re-examination report of Customs officers categorically stated that the goods were branded LED Panels and encased in TV casing but without the speakers, without the remote controls, without the power cables, without the Mother board and without the sockets. The box in which the goods were contained is also found to have been labeled LED panel as per the photocopy of one side of the box. It is further seen that as per the sale invoices the appellant has been selling these goods to the various traders in the name of LED panels only. Further, LED panels devoid of speakers, remote controls, power cables, Mother board and sockets can scarcely be called as having essential characteristics of Television. Indeed in the trade, LED panels are commonly available and they become television when speaker and mother board and other parts mentioned earlier are attached thereto. Therefore, the goods have to be treated as LED panels (and not as LED Television) and LED panels are freely importable and do not require any BIS registration. - Decided in favour of appellant with consequential relief

Summary

Issues:
1. Classification of imported goods as Television or LED panels
2. Requirement of BIS registration for imported goods
3. Confiscation under Section 111(d) and 111(m) of the Customs Act, 1962
4. Imposition of penalty

Analysis:

Classification of imported goods as Television or LED panels:
The appellant argued that the imported goods were LED panels and not televisions as they lacked essential components like speakers, remote controls, power cables, Mother board, and sockets. Customs officers' reports confirmed the absence of these components. The goods were used for repairing televisions or sold as LED panels. The department contended that the goods could be easily converted into televisions by adding the missing parts. However, the examination reports and invoices indicated that the goods were branded LED panels without the necessary components to be classified as televisions. The Tribunal concluded that LED panels without the essential parts cannot be considered as televisions, as they are commonly available and only become televisions when additional components are attached.

Requirement of BIS registration for imported goods:
The decision hinged on whether the imported goods, classified as LED panels, required BIS registration. LED panels were deemed freely importable and exempt from BIS registration. Since the goods were considered LED panels and not televisions, they did not fall under the category requiring BIS registration. This aspect played a crucial role in determining the legality of the import.

Confiscation under Section 111(d) and 111(m) of the Customs Act, 1962:
The order-in-original had imposed confiscation under Section 111(d) and 111(m) of the Customs Act, 1962 due to the alleged import of goods requiring BIS registration without possessing it. However, the Tribunal's analysis revealed that the goods were LED panels, not televisions, and thus did not necessitate BIS registration. Consequently, the confiscation order was found to be unsustainable and set aside.

Imposition of penalty:
In addition to confiscation, a penalty of ?25,000 was imposed on the appellant. The Tribunal's decision to set aside the confiscation order also rendered the penalty invalid. The appeal was allowed with consequential relief, if any, based on the findings that the impugned order was not sustainable due to misclassification of the imported goods as televisions.

This detailed analysis of the judgment highlights the key issues addressed by the Tribunal, focusing on the classification of the imported goods, the requirement of BIS registration, confiscation under relevant sections of the Customs Act, and the imposition of penalties.