2024 (4) TMI 832 - AT - Customs

Misdeclaration of classification - confiscation - Penalty u/s 112 (a) - children building/constructable robot toys in CKD condition with individual box packing and are electronic toys - drones - Teaching Aid's in schools - classified under CTH-90230010 - Seeking for re- export the goods to Qatar - huge demurrage charges and goods - HELD THAT - In the present case, the appellant has produced sufficient evidence to substantiate that the goods are imported for the purpose of demonstration in schools. Hence, the goods imported from Sl. No. 1 to 3 may not be classifiable as toys under CTH 9503 as held by the Adjudication Authority and the Appellant Authority. Further, the adjudication authority s finding that since the quantity imported is 30 nos. each they cannot be for demonstrational purpose is not tenable, since the quantity imported cannot have a bearing on the classification of the imported goods. Since there is no other classification confirmed, the goods from S.No. 1 to 3 can be classified under 9023 as declared by the importer. Further in the absence of any restriction to import the goods falling under CTH 9023, the said goods are also not liable for confiscation. Violation of importing restricted goods - Import of Litebee wing-Nano Drone Components kits - Re-export of goods - HELD THAT We find as regards the import of drone at Serial No. 4, as per the DGFT Notification No. 54/2015 -2020 dated 09.02.2022, import of drone is prohibited and even if it is permitted to import it is subject to approval from DGFT. Drone in CBU, SKD or CKD form is permitted to be imported only by education institutions recognised by Central or State Governments. In the present appeal , though the appellant is involved in activity related to supporting education institutions, appellant is not an educational institution recognised by Central or State Governments. Moreover, import of drone is prohibited due to security reasons. Thus, drone imported by the appellant cannot be allowed to be released for home consumption even on payment of redemption fine and penalty. Since, violation of importing restricted goods is admitted, confiscation of drone ( Serial No. 4 ) is upheld. However, considering the delay, a lenient view can be taken for redemption of the same for re-export to Qatar as requested by the appellant. Thus, appeal is partially allowed directing release of the goods at serial number 1 to 3 at para 2 supra as per the declaration made by the appellant for home consumption. Regarding drone (Sl. No. 4 ) order of confiscation is upheld. However, the appellant is permitted to redeem the drones having declared value of Rs. 2 ,68,943 /- for re-export to Qatar on payment of reduced redemption fine of Rs. 25,000/- and Penalty of Rs. 10 ,000/-. In the result the appeal is partially allowed as per the above terms.

Summary

Issues involved: Classification of imported goods under Customs Tariff Heading (CTH), liability for confiscation, request for re-export, appeal against the order of adjudication authority.

Classification of goods at Serial No. 1 to 3:
The appellant imported goods for educational purposes, specifically as teaching aids for smart education in schools. The Adjudication Authority classified the goods under CTH 9503 as toys, leading to confiscation. However, evidence presented by the appellant demonstrated agreements with schools for educational use, not recreational purposes. The Tribunal found the goods suitable for educational demonstration under CTH 9023, not as toys, and allowed their release for home consumption.

Import of drone at Serial No. 4:
The import of drones was subject to restrictions and required approval from the Directorate General of Foreign Trade (DGFT). The appellant, not recognized as an educational institution by the government, imported a drone in violation of regulations. Despite the prohibition on drone imports for security reasons, the Tribunal allowed redemption of the drone for re-export to Qatar, acknowledging the delay and imposing a reduced redemption fine and penalty.

Decision:
The Tribunal partially allowed the appeal, directing the release of goods at Serial No. 1 to 3 for home consumption as teaching aids and upholding the confiscation of the drone at Serial No. 4. The appellant was permitted to redeem the drone for re-export to Qatar with reduced fines and penalties. The judgment was pronounced on 19.04.2024.