2024 (1) TMI 96 - AT - Customs

Confiscation - Violation of legal requirements of Electrical Capacitor (Quality Control) Order, 2017 - import of CRE Film Capacitor AKMJ-MC 200UF and 400UF - impugned goods carries BIS standard compliance certification or not - HELD THAT - The legal requirements which have been not complied with by the appellants have arisen from the compliance requirements under Electrical Capacitor (Quality Control) Order, 2017 which have been issued by the Government of India, in exercise of the powers vested under Section 14 of the Bureau of Indian Standards Act, 1986. The imported goods have been clearly described by the appellants in the B/E No. 7500016 dated 15.02.2022 as CRE Film Capacitor AKMJ-MC 200UF /- 5% 330VAC - 90 nos. and CRE Film Capacitor AKMJ-MC 400UF /- 5% 330VAC 231 nos. providing other relevant details of import such as name of the supplier as Wuxi Cre New Energy Technology Co. Ltd., Jiangsu, China and the invoice no. CREPP 220106 dated 06.01.2022 , classifying the goods under CTI 8532 2990 etc. - It cannot be appreciated on how and on what basis, the learned Commissioner (Appeals) had come to the conclusion that there was mis-declaration in respect of the description of the goods. In fact such an assertion in the impugned order is contrary to the facts of the case on record. The imported CRE film capacitors are meant for use as components in the power supply equipment manufactured by M/s Fuji Electric Consul Neowatt Pvt. Ltd. Thus, in terms of paragraph 1.2 (k) of the IS 13340 1993, the imported goods are excluded from the scope of coverage as well as compliance with the requirements of IS 13340, as the same are specifically kept out of the items for which of such standards would apply. The appellants have duly filed the B/E in respect of the imported goods and paid the applicable customs duties. It is not the case of the Department, that there was any issue of misdeclaration other than those with respect to the compliance of IS 13340 1993. Inasmuch as, the imported goods are specifically excluded from the scope of IS 13340 1993, it is found that the requirements under Electrical Capacitor (Quality Control) Order, 2017 is also not applicable in the present case - the alleged violation of 111(d) ibid, as concluded in the impugned order is not sustainable - the conclusion arrived by the learned Commissioner of Customs (Appeal) in the impugned order is not supported by any evidence or factual detail, to fasten the liability on the part of the appellants for confiscation of the imported goods or for imposition of penalty on the appellants. There are no merits in the impugned order passed by the learned Commissioner of Customs (Appeal), in confirming the absolute confiscation of goods and imposition of penalty, inasmuch as there is no violation of Section 111(d) ibid, and the findings in the impugned order is contrary to the facts on record - the impugned order set aside - appeal allowed in favour of the appellants.

Summary

Issues Involved:
1. Compliance with BIS Standard IS 13340 for the imported capacitors.
2. Legality of the confiscation of goods under Section 111(d) of the Customs Act, 1962.
3. Imposition of penalty under Section 112(a)(i) of the Customs Act, 1962.

Summary:

Compliance with BIS Standard IS 13340:
The appellants, M/s Pelf Power Electronics Private Limited, imported 'CRE Film Capacitor AKMJMC - 200UF and 400UF' and classified them under Customs Tariff Item 8532 2990, paying the applicable import duty. The Customs officer raised a query regarding compliance with BIS Standard IS 13340. The appellants argued that the imported goods are 'dry type capacitors' used in power electronics applications and are not covered under BIS Standard IS 13340, which applies to 'power factor correction and power factor capacitors'. They provided a letter from the manufacturer certifying the same, which was not considered by the authorities.

Legality of the Confiscation of Goods:
The original authority confiscated the goods under Section 111(d) of the Customs Act, 1962, and imposed a penalty under Section 112(a)(i). The Commissioner of Customs (Appeals) confirmed the order, stating that the goods were mis-declared and intended to import sub-standard goods without fulfilling the mandatory BIS requirement. However, the Tribunal found that the appellants had accurately described the goods in the Bill of Entry and commercial invoice, and there was no mis-declaration. The imported goods were excluded from the scope of IS 13340:1993 as they were intended for use as components in power supply equipment, thus not requiring BIS certification.

Imposition of Penalty:
The Tribunal held that the appellants had not violated any legal requirements under the Electrical Capacitor (Quality Control) Order, 2017, as the imported goods were excluded from the scope of IS 13340:1993. Therefore, the confiscation of goods under Section 111(d) and the imposition of penalty were not sustainable. The Tribunal set aside the impugned order, allowing the appeal in favor of the appellants.

Conclusion:
The Tribunal concluded that the appellants had complied with the necessary legal requirements, and there was no basis for the confiscation of goods or imposition of penalty. The appeal was allowed, and the impugned order was set aside.