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2024 (12) TMI 296 - AT - CustomsEvasion of customs duty - mis-declaration with respect to brand of goods/description of goods - undervaluation in import of goods - applicability of benefit of Exemption N/N. 50/2017 dated 30.06.2017 - invocation of Extended period of limitation. Whether the appellant had imported complete TV sets/TV sets in SKD condition or the imported goods were the parts and panels of the TV as different from the complete TV? - Whether Rule 2(a) of General Interpretation Rules applies to given set of facts and circumstances? - HELD THAT - The TV is a complicated electron i.e. product and a product namely LED panel in itself is highly insufficient to be called as TV. There are many other parts and components which are collectively required to hold that the LED monitor has an essential character of being called as TV. As already held department has not got the technical evaluation done about the impugned imported goods. There is no evidence produced by the department to prove the allegations. As per the dictionary meaning, TV is an electronic system of transmitting transient images of fixed or moving objects together with sound over a wire or through space by apparatus that converts light and sound into electrical waves and reconverts them into invisible light and audible sounds. The Department of Electronics, Government of India vide their Letter No. 22(1)/93/Exp dated 10.08.1993 have clarified as to what constitutes a TV set - the literature about smart TV is perused piece by piece as provided by the appellant. According to the said literature, complete TV set has as many as 25 main essential parts. The decision in Sony India 2008 (9) TMI 19 - SUPREME COURT has already appreciated about the technicality of the manufacturing procedure of TV and the several number of parts required to give any monitor, the essential character of TV. The Hon ble Apex Court in Salora International Ltd. 2012 (9) TMI 276 - SUPREME COURT had concluded that the imported goods had the essential character of being called the TV receivers/TVs - the imported goods are the parts and components of the TV as different from the complete TV in SKD condition and Rule 2 of GRI cannot be invoked in such situations. Both the issues therefore stand decided in favour of the appellants. Whether the appellant is entitled for the exemption benefit of Notification No. 50/2017 dated 30.06.2017 entry at Sl.NO. 514? - HELD THAT - Since it has been held that appellant has imported LED panels along with few of the parts of TV for manufacturing and few essential parts have not been imported. Also some of the imported goods have been sold by the appellants to other TV manufacturers. Hence the imported goods cannot be called as complete TV but the parts thereof. The above noted entry exempts the import of parts for manufacture of TV from payment of duty, hence, appellant is held entitled for the benefit of the said notification. With these observations, this issue also decided in favour of the appellants-importers. Whether appellant has undervalued the imported goods and has wrongly mentioned those as unbranded? - HELD THAT - As apparent from show cause notice the allegations of undervaluation have been leveled based on the higher amount found mentioned in performa invoices as got retrieved by the proprietors of the importing firms from their e-mail IDS got opened by them in the Officer of SIIB at the computer systems of the said office. Primarily the admissibility of computer print-outs has been objected by the appellant for want of certificate as required under Section 138C of the Customs Act which talks about the admissibility of micro films facsimile copies of documents and computer print outs as document and as evidence - in the present case the computer print outs of the performa invoices have not been retrieved by the officers of the department nor from the seized laptop. In the present case the label of Samsung brand was only on packing material. It is not the case of the department that other components were too small in size to have labels of brands. It is also nowhere denied that the Samsung Brand was affixed only on Chip in addition to be affixed on the packing material. Chip is admittedly of Samsung Brand but rest all the imported parts/ components are denied to be branded. Department has failed to get the imported goods examined by the Chartered Engineer. (CE) Earlier Bill of Entry no. 5131023 dated 03.05.2016 of the year 2016 importing similar goods was detained and the goods were got examined by the CE. Hence the present case is neither of misdeclaration vis- -vis brand name nor of undervaluation. This issue also stands decided in favour of the appellants. Whether the extended period of limitation has rightly been invoked while issuing the impugned show cause notice? - HELD THAT - The appellants, admittedly, have all the necessary permissions to carry out manufacturing as well as assembling of all the local products in his warehouse. The GST Certificate, BIS Certificate, ITR Returns of last 3 years, MSME Registration Certificate, Pollution Certificate, Factory Licenses MCD, Procedure of BIS Making were also duly submitted by the appellant. Thus every fact was already in the knowledge of the department. These observations are sufficient to hold that there is no mala fide nor any mis-declaration found on part of the appellant. There is no evidence by the department that the consignments in question have different goods than those which were imported in the year 2016. The burden of proving the allegations was upon the revenue - the extended of limitation has wrongly been invoked. Show cause notice itself is held barred by time. This issue also stands decided in favour of the appellant and against the department. The appellant is entitled for the duty exemption benefit of N/N. 50/2017. There is no evidence of alleged mis-declaration and undervaluation. The order imposing penalties is also not sustainable. Accordingly, the order under challenge confirming differential demand and imposing penalties on three of the appellant is hereby set aside. Consequent to entire above discussion, the appeals are hereby allowed.
Issues Involved:
1. Whether the appellant had imported complete TV sets/TV sets in SKD condition or the imported goods were the parts and panels of the TV as different from the complete TV? 2. Whether Rule 2(a) of General Interpretation Rules applies to given set of facts and circumstances? 3. Whether the appellant is entitled to the exemption benefit of Notification No. 50/2017 dated 30.06.2017 entry at Sl.No. 514? 4. Whether the appellant has undervalued the imported goods and has wrongly mentioned those as unbranded? 5. Whether the extended period of limitation has rightly been invoked while issuing the impugned show cause notice? Detailed Analysis: Issue No. 1 & 2: The core issue was whether the imported goods were complete TV sets in SKD condition or merely parts and panels of TVs. The department argued that the goods should be classified as complete TVs under CTH 852872, invoking Rule 2(a) of the General Interpretation Rules, which states that incomplete or unfinished articles with the essential character of complete articles should be classified as complete. However, the tribunal found that the department failed to provide evidence proving the imported goods constituted complete TVs. The appellants demonstrated that several essential parts were not imported and provided evidence of selling parts in the local market, contradicting the department's claims. The tribunal concluded that Rule 2(a) was wrongly invoked and the goods were indeed parts and panels, not complete TVs. Issue No. 3: The tribunal held that the appellants were entitled to the exemption benefit under Notification No. 50/2017 for importing parts and panels for manufacturing TVs. Since it was established that the imported goods were not complete TVs, the exemption applied, and the benefit of the notification was rightfully claimed by the appellants. Issue No. 4: The allegations of undervaluation were based on proforma invoices retrieved from the appellant's email. The tribunal noted that these invoices were not sufficient evidence of undervaluation. The department failed to provide contemporaneous import data or any evidence of related parties or extra payments beyond normal banking channels. The tribunal emphasized that mere suspicion on invoices is not enough to reject transaction values and held that the transaction value must be accepted as per Rule 14 of the Valuation Rules. Additionally, the tribunal found no evidence to support claims that the goods were branded as 'Samsung,' as the only branded part was a chip, and the packaging label was attributed to the supplier's customization. Issue No. 5: The tribunal found that the extended period of limitation was wrongly invoked. The department's allegations of misdeclaration and suppression of facts were not substantiated with evidence. The appellant had provided all necessary documentation and permissions for manufacturing and assembling activities, which were already known to the department. The tribunal concluded that there was no mala fide intention or misdeclaration by the appellants, rendering the show cause notice time-barred. Conclusion: The tribunal allowed the appeals, setting aside the order imposing penalties and confirming differential demand. The appellants were entitled to the duty exemption benefit, and there was no evidence of misdeclaration or undervaluation.
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