2013 (12) TMI 709 - AT - Customs

Denial of benefit of Notification - Import of battery for cellular phone - Whether the benefit of Notification No. 21/2005-Cus dated 1/3/2005 (Sl. No. 320) was admissible to the respondent in respect of battery for cellular phone, imported by them vide Bill of Entry No. 3514 dated 1/4/2005 - Held that - parts, components and accessories of mobile handsets including cellular phones were chargeable to nil rate in respect of basic customs duty and additional customs duty (CVD) under Sl. No. 320 of Customs Notification No. 21/05 at the time of importation of the subject goods. It is not the case of the appellant that the importer did not satisfy the relevant condition. It is common knowledge that a cellular phone cannot function without a battery. If that be so, the battery has to be considered as accessory, if not part/component, of cellular phone and consequently, the benefit of the Notification is admissible to the item imported by the respondent - Decided against Revenue.

Summary

Issues:
1. Interpretation of Notification No. 21/2005-Cus dated 1/3/2005 regarding the classification of battery for cellular phone as part/component/accessory of mobile handset.
2. Admissibility of benefit of the Notification to the respondent in respect of the imported battery.
3. Challenge to the decision of the Commissioner (Appeals) regarding the classification of the battery.

Analysis:
1. The appeal raised the question of whether the benefit of Notification No. 21/2005-Cus dated 1/3/2005 was applicable to the respondent's imported battery for a cellular phone. The original authority denied the benefit, stating that the battery could not be considered as part/component/accessory of a mobile handset. However, the Commissioner (Appeals) overturned this decision, considering the battery as part of a mobile handset. The appellant challenged this decision, arguing that a battery is a general usage power source and not a specific equipment part. The Tribunal noted that mobile handsets, including cellular phones, were chargeable to nil rate under the Notification, and since a cellular phone cannot function without a battery, the battery should be considered an accessory, if not a part/component, of the phone. The Tribunal distinguished a previous case where parts/components of a cellular phone battery were considered, not the battery itself. Consequently, the Tribunal upheld the decision of the Commissioner (Appeals) and dismissed the appeal.

2. Despite notice, the respondent did not provide representation or request an adjournment. The Tribunal carefully considered the submissions and found that the imported battery for the cellular phone was eligible for the benefit of the Notification. The Tribunal highlighted that a cellular phone requires a battery to function, indicating that the battery should be considered an accessory or part/component of the phone. The Tribunal disagreed with the appellant's argument that the battery was a general usage item, emphasizing the specific context of the cellular phone in this case. As the importer satisfied the relevant conditions, the Tribunal concluded that the benefit of the Notification applied to the imported battery.

3. The appellant's challenge to the decision of the Commissioner (Appeals) was based on the argument that a battery is not a part/component/accessory of the electrical/electronic equipment with which it is used. However, the Tribunal clarified that in the context of mobile handsets, including cellular phones, the battery is essential for the device to operate. The Tribunal differentiated the current case from a previous decision involving parts/components of a cellular phone battery, affirming that the imported battery for the cellular phone should be considered an accessory or part/component of the phone. Therefore, the Tribunal upheld the decision of the Commissioner (Appeals) and dismissed the appeal.