2024 (3) TMI 87 - AT - Customs

Seeking release of imported goods - confiscation - penalty - imported balloons for party decorations, pumps and balloons stands - Requirement of compulsory registration scheme under BIS before completion of import - violation of import policy in terms of the TQC Order - improper importation of the subject goods without BIS Certificates - whether party items / inflatable balloons for party decoration are covered under the scope of the TQC Order? - HELD THAT - Appellant has classified the imported balloons under CTH 9503 as Toys and balloons for the reason that as per Analytics Report 46/2021-22 issued by National Customs Targeting Centre, Mumbai, wherein it is stated that balloons are to be classified under CTH 9053. The said report did not make any distinction between toy balloons and decoration balloons. As per the Toys (Quality Control) Order 2020 issued by Department for Promotion of Industry and Internal Trade, Ministry of Commerce (DPIIT) applies to Toys designed or clearly intended or not exclusively for use in play by children under 14 years of age. In the present case, the appellant has consistently from the very beginning contended that they are engaged in the business of decorations using balloons, and the goods (balloons) imported were intended to be used only for decoration. The department has not been able to establish otherwise. As per the list of items shown in the IS 9873 (Part I) 2012 item at (k) shows that holiday decorations that are primarily intended for ornamental purposes are excluded. Thus goods used for decoration is excluded. The said item at (k) does not make any distinction or differentiation based on the material used in for the balloon. Further, in the present case the appellant offered to test the goods as to the nature of the material used. The department did not conduct any test. Thus, we are of the considered opinion that the order passed by original authority confiscating the goods and directing for re-export cannot be sustained. The impugned order is set aside. The goods are to be released to the appellant on payment of applicable duty, if any. The redemption fine is also set aside. In the result, the appeal is allowed with consequential reliefs, if any.

Summary

Issues Involved:
1. Classification of imported balloons.
2. Requirement of BIS certification for imported balloons.
3. Confiscation and penalty imposed by the Original Authority.
4. Applicability of the Toys (Quality Control) Order, 2020.

Summary:

1. Classification of Imported Balloons:
The appellant classified the imported balloons under CTH 9503 based on the Analytics Report 46/2021-22 issued by the National Customs Targeting Centre, Mumbai, which stated that balloons are classifiable under CTH 9503. The department did not distinguish between toy balloons and decoration balloons, leading to the classification issue.

2. Requirement of BIS Certification:
The department argued that the balloons required compulsory registration under the Bureau of Indian Standards (BIS) as per the Toys (Quality Control) Order, 2020, which mandates that toys designed or intended for use by children under 14 years must conform to IS 9873 standards. The appellant contended that the balloons were intended for party decoration and not for use by children, thus exempt from BIS certification.

3. Confiscation and Penalty Imposed by the Original Authority:
The Original Authority ordered the confiscation of the goods under Section 111(d) of the Customs Act, 1962, with an option to re-export the goods on payment of a redemption fine of Rs. 30,000/-. A penalty of Rs. 25,000/- was also imposed under Section 112(a) of the Customs Act, 1962. The Commissioner (Appeals) upheld this order.

4. Applicability of the Toys (Quality Control) Order, 2020:
The appellant relied on the clarification from the Department for Promotion of Industry and Internal Trade (DPIIT), which stated that holiday decorations intended for ornamental purposes are excluded from the scope of the TQC Order. The High Court of Calcutta in Commissioner of Customs Port vs. Ess Enn Impex and another, and the Authority for Advance Rulings Customs, Mumbai, in In Re: Bharat Balloon House, supported this view, stating that such balloons are not toys and thus do not require BIS certification.

Judgment:
The Tribunal held that the imported balloons were intended for decoration purposes and not as toys for children, thus exempt from BIS certification. The confiscation order and the penalty imposed by the Original Authority were set aside. The goods were ordered to be released to the appellant on payment of applicable duty, if any, and the redemption fine was also set aside. The appeal was allowed with consequential reliefs.

Conclusion:
The Tribunal concluded that the imported balloons used for party decorations are not liable for confiscation under the Toys (Quality Control) Order, 2020, and do not require BIS certification. The appeal was allowed, setting aside the confiscation and penalty orders.