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2024 (11) TMI 743 - AT - CustomsClassification and valuation - Import of 2000 pieces of infrared contactless thermometer - HELD THAT - The impugned order is unclear about the manner in which the impugned goods fit the description of digital thermometers and while the characteristics of the imported goods as obtained from the product catalogue are enumerated, the standards by which the imported goods were to be evaluated for conformity with the description as digital thermometers has not been set out. The heading itself comprises several types of measuring instruments and thermometers, themselves, are found to be corresponding to sub-heading under 902511 and 902519 of First Schedule to Customs Tariff Act, 1975 implying that a range of thermometers would fall under either sub-heading. That the impugned goods are not covered by sub-heading 902511 is not in dispute inasmuch as this sub-heading deals with liquid filled measuring instruments while the alternative sub-heading is a residuary one including digital thermometers and pyrometers but there is no description either in the notes to the chapter or in section notes and no reference been made to Harmonized System of Nomenclature (HSN). It would thus appear that the resort to classification has been done without any basis for the standard by which the comparison was to be made. Onus of proper officer to establish that the goods are aptly classifiable against the proposed description. The enumeration of the characteristics of the impugned goods are meaningless in the absence of such benchmark or is used in common parlance as description of the product. From the submissions of Learned Consultant, it appears that the impugned goods are intended for measuring temperature from a distance by subjecting the forehead to exposure by infra read rays and for the reading to be displayed. To the extent of display in digital mode, there cannot be doubt that the impugned goods could be prescribed as digital thermometer but the similarity appears to end with that. In any case, in such circumstances of lack of any definition or assistance from the notes referred supra, it was incumbent upon the lower authorities to ascertain the description intended by the several expressions below the sub-heading 902519. That exercise has not been carried out to and requires remedying. On the issue of valuation, it would appear that reliance has been placed on certain imports that were available in records of the customs formation. It is also seen that rule 5 of Customs Valuation (Determination of Value of Imported Goods) Rules, 2007 has been resorted to. Though resort to different rules on each occasion besides lack of certainty, it cannot be said that the notice was not alerted to the possibility of revision by one or other of the prescribed method inasmuch as the declared value was proposed to be discarded. We find no infirmity in the process by which the original authority justified the revision; however, with the issue of classification requiring fresh consideration, revision in valuation, as a consequence, does not acquire finality. It would, therefore, be appropriate for the applicability of the Customs Valuation (Determination of Value of Imported Goods) Rules, 2007 to be redetermined only if warranted by change of classification.
Issues: Classification and Valuation
Classification Issue Analysis: The case involves an appeal by M/s Mirc Electronics India Pvt Ltd regarding the classification of imported goods declared as 'infrared contactless thermometer.' The original authority revised the classification based on the product characteristics, leading to a dispute. The appellant challenged the classification adopted by the original authority, arguing that the first appellate authority affirmed the decision without considering their submissions. The Tribunal noted that the impugned order lacked clarity on how the imported goods fit the description of 'digital thermometers.' The Tribunal emphasized that the onus lies with the proper officer to establish the goods' correct classification. It was observed that the lower authorities failed to determine the intended description under the relevant sub-heading, requiring a fresh assessment. The Tribunal concluded that the classification issue needed further examination and remanded the matter back to the original authority for a decision. Valuation Issue Analysis: The valuation issue arose due to the enhancement of the imported goods' value and a change in classification. The duty recoverable was calculated at a higher amount, leading to a total of &8377; 14,62,000. The Tribunal noted that different valuation methods were applied during the proceedings, jeopardizing the customs authorities' case. While the original authority's justification for the valuation revision was deemed acceptable, the issue of classification required reevaluation. The Tribunal determined that the valuation's finality depended on the outcome of the classification reassessment. Consequently, the Tribunal set aside the impugned order and remanded the matter to the original authority for a comprehensive decision on both the classification and valuation issues. In conclusion, the Tribunal's judgment focused on the lack of clarity in the classification process, emphasizing the need for proper assessment and benchmarking for classification decisions. The valuation issue was intricately linked to the classification matter, necessitating a fresh evaluation based on the classification outcome. The Tribunal's decision to remand the case back to the original authority aimed at ensuring a thorough examination of both the classification and valuation aspects to reach a fair and accurate resolution.
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