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TMI Blog2024 (12) TMI 296X X X X Extracts X X X X X X X X Extracts X X X X ..... cter 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... neer. (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 - ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... importing in past also complete TV sets in SKD condition classifiable under CTH 85287211, 85287212 and 85287213 but wrongly declaring them as the parts of TV wrongly classifying them under CTH 85299090 with the mala fide intent to avail the benefit of Notification No. 50/2017. The goods of Bill of Entry No. 4747421 dated 10.01.2018 were examined by the officers of SIIB, ICD-TKD, Delhi on 15.01.2018. The previous Bills of Entry No. 3792626 dated 28.10.2017 for 55 LED TV panels and Bill of Entry No. 3798724 dated 30.10.2017 for 55 LED TV parts with unit price for USD 170 and USD 11 respectively were looked into. The Bill of Entry of the Year 2016 bearing no. 7077471 dated 14.10.2016 pertaining to proforma invoice no. 16G028 dated 23.07.2016 were also looked into. From the comparison thereof and the physical examination, the department formed the opinion that the goods were ordered to be supplied as complete TV sets in SKD form, however, those were deliberately unassembled into panels and parts and were shipped into different containers to take the inadmissible benefit of customs Notification No. 50/2017 by mis-declaring the goods as monitors with the mala fide intent to evade payment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ereof was provided to the appellant. The allegations of mis-declaration and undervaluation have been made against the appellant relating to the Bills of Entry of past dates. No live consignment has been saved by the department. 3.1 Learned counsel has impressed upon that appellant is importing only parts and panels vide the impugned Bills of Entry. The goods under these Bills of Entry are not at all sufficient to constitute a proper working television. The department has not produced any chartered engineer report to support the allegations that the imported goods which were examined were sufficient and essential to be called as the complete TV set. Thus, there is no evidence to hold that the imported goods imported were the TV sets in SKD conditions. It is brought to notice that the appellants have also been locally procuring the remaining parts which are equally essential/crucial for a functional television like optical sheet, smart real engine, speed backlight engine, power board etc. The imported goods and locally procured goods are then assembled together by the appellant to manufacture the complete TV set. 3.2 It has also been mentioned that all imported goods were not meant f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... flects the complete arbitrariness on part of the department. The burden was of the department to prove the allegations. The department has failed to bring on record the evidence even with respect to the contemporaneous imports. Though there have been allegations that the differential amount has been paid by the appellant through hawala channels but there is no evidence about any single person to whom the differential value amount would have been handed over nor any evidence about the mode of making payment of the differential amount. 3.6 Finally it is submitted that in the light of pre-approval by the department in favour of the appellant, the extended period of limitation while issuing the show cause notice in terms of Section 28(4) of Customs Act, 1962 has wrongly been invoked. To support his submissions, learned counsel has relied upon the following decisions: (i) Commissioner of Customs, Calcutta Vs. South India Television (P) Ltd. reported as 2007 (214) ELT 3 (SC) (ii) H.S. Chadha Vs. Commissioner of Customs (Preventive), New Delhi reported as 2021 (378) ELT 193 (Tri. Del.) (iii) Commissioner of Customs- Nhava Sheva-III Vs. M/s. Granite India in Customs Appeal No. 50019 of 202 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... shall fall, for the purpose classification, under the CTH pertaining to the complete/finished article irrespective the goods were imported in unassembled or disassembled condition. To support his submissions, learned Departmental Representative has relied upon the following decisions: (i) Salora International Ltd. Vs. Commissioner of C. Ex., New Delhi reported as 2012 (284) ELT 3 (SC) dated 07.09.2012 (ii) Thomson Consumer Electronics Vs. C.C., Chennai 2004 (164) ELT 292 (CESTAT) dated 28.10.2003 (iii) Varshatronics Vs. Commissioner of Customs, Chennai 1999 (106) ELT 89 (CEGAT) dated 27.11.1998 (iv) Hindustan Udyog Vs. Commissioner of C. Ex., Calcutta-III 2001 (133) ELT 405 (CEGAT) dated 20.11.2000 (v) Commissioner of Customs, Indore Vs. Hindustan Motors Ltd. reported as 2003 (156) ELT 155 (CESTAT) dated 30.06.2003 (vi) Banke Bihari Electronics Pvt. Ltd. Vs. Principal Commissioner of Customs (import), ICD-TKD, Delhi CESTAT Final Order No. 55814-55820/2024 dated 27.05.2024 (vii) Bird Retail Pvt. Ltd. Vs. Commissioner of Customs (Import), New Delhi reported as 2020 (373) ELT 267 (Tri.-Del.) dated 24.02.2020 (viii) Olympic Export Vs. C.C., New Delhi reported as 2018 (7) TMI 1803 CESTA ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... led for reasons such as requirements or convenience of packing, handling and transport which is not department s case. Goods imported in completely knocked down (CKD) condition are complete goods or just a conglomeration of parts. Issues are two. First issue is if the goods in CKD/SKD condition are complete goods or not, when some parts are not there. Second, there are always exemptions for goods imported in CKD condition or as parts. The question arises about the applicability of exemption. The general principle that is applicable on these two issues is given in the statutory rules called General Rules for the Interpretation of this Schedule. The Schedule refers to both the Customs and Central Excise Schedules. The concerned Rule 2(a) says that when incomplete goods are presented before customs for clearance and they have the essential character of complete goods, they have to be classified as complete goods. 6.3 To adjudicate both these issues, we foremost perused Rule 2(a) of GRI. It reads as follows: 2. (a) Any reference in a heading to an article shall be taken to include a reference to that article incomplete or unfinished, provided that, as presented, the incomplete or unfin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... quantity, weight or value or by the role of a constituent material in relation to the use of the goods. No doubt rule 3(b) dealt with mixture and composite goods and it was in that context that the words essential character had been construed in the manner mentioned above. But we feel that the test of essential character as mentioned in the CCCN under rule 3(b) would also be very relevant in construing the said words in rule 2(a) also. It, therefore, appears that in order to apply the provisions of rule 2(a) it has to be seen (1) whether the imported product had attained the approximate shape or outline of the finished article; (2) whether the said imported article can only be used for completion into the finished article and (3) these would have to be determined with reference to the nature of the material, its bulk, quantity, weight or value. This very enumeration would therefore establish that no general principles can be laid down as to how and in what circumstances rule 2(a) could be pressed into service for assessment of the imported unfinished article. In each case the factors enumerated above would have to be taken into consideration individually, and then collectively, to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assembled the incomplete article has the essential character of a complete article. In the context of automobiles, the HSN Notes at page 1423 cites the cases of cars without batteries and tyres, or even the engines, as examples of such articles having the essential character of complete articles. In his background, the Board once again desires the field formations to take due note of the provisions or rule 2(a) of the above said Interpretative Rules, while dealing with such cases. Regarding import licence, the EXIM Policy restricts the imports of not only complete consumer articles but also these articles in SKD/ CKD condition or ready to assemble sets. Accordingly such imports require a specific import licence. However, in some cases it has been noticed that the various bodies of the Government like the Secretariat of Industrial Approvals, FIPB etc., have approved the projects for the manufacture of such articles, with permission to import SKD kits in the initial period. Though the import licence is a must in these cases also, still if by mistake the importers have not obtained the licence prior to the imports, they may be advised to obtain the same and the cases need not be adju ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) Speed Backlight Engine (13) Tune/Jack (14) 3D Hyper Real Engine (15) Power Board (16) Ambient Light Censor (17) Bluetooth Module (18) Wifi Module (19) Speakers (20) Quad Stand (21) Operation Touch Button (22) Video Telephone Camera (MoIP) (23) Wall Mount (24) Qwerty Remote Control (25) 3D Glasses It is also mentioned that following parts out of above mentioned parts have not been imported: (i) Optical Sheet (ii) LGP (Light Guide Plate) (iii) Smart Real Engine (iv) Speed Backlight Engine (v) Bluetooth Module (vi) Wifi Module There appears no denial to this fact nor any evidence is produced by the department to prove that without these parts also, the imported goods were complete TV in CKD condition. 6.8 learned counsel for appellant also raised the point that Goods imported separately cannot be clubbed together as discussed in the following cases. The Tribunal in the case of P.R. Trivedi vs. CC - 2005 (192) E.L.T. 801 (Tri. - Mumbai) held that if the goods are imported and presented by different importers they cannot be allowed to be treated as complete car cassette player. Even if they are imported by the same importer but in different consignments, they still do not become compl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e TV in reality and department had to prove the alleged reality. The cogent evidence would have been the report of expert but the goods of live consignment admittedly not get examined by the expert (Chartered Engineer). Hence it stands unproved/unestablished that all the parts and components as have been imported by the appellant during the Year 2015, 2016, 2017 and in the Year 2018 are sufficient to have the essential character of TV. The department has merely proceeded based on the presumption that number of imported LED Panels is same as the number of other parts of the TV as have been imported by the appellant during the proximate time. The said allegation has been falsified by the sale invoices showing sale of few of the imported goods. There is no rebuttal of department to those invoices. Rather the invoices are sufficient to falsify the department s plea that the imported goods have same number of parts as that of the imported LED Panels which amounts to importing complete TV in SKD condition. We hold that due to lack of this evidence, Rule 2(a) of General Rules of Interpretation has wrongly been invoked. 6.12 We also observe from the record that with respect to the Bill of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mponents Vs. Commissioner of Central Excise, Ahmedabad reported as 2003 (157) ELT 529. In the said case, it was held that a TV set with hand held remote control unit will only constitute a complete TV set. 6.15 We have also perused the literature about smart TV; piece by piece as provided by the appellant. According to the said literature, complete TV set has as many as 25 main essential parts as already mentioned above. The decision in Sony India (supra) as quoted above 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. 6.16 Similar allegations were leveled against the appellants in the Year 2016. But the report of expert (Chartered Engineer) falsified the allegations. Once no discrepancy was found in the consignment imported by the appellant on 03.05.2016, no question arises for any discrepancy when the same appellant has imported the same parts and components in subsequent year especially where there is no evidence to prove the allegations. The department has relied upon the decision of Hon ble Supreme Court in the case Salora International Ltd. (supra) b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. The decision of Hon ble Supreme Court in the case of Anvar P.V. Vs. P.K. Basheer reported as 2017 (352) ELT 416 (SC) as relied upon by the appellant is perused. It is observed that while dealing with Section 65B of the Evidence Act, 1872 (Pari materia to Section 138C of the Customs Act, 1962), Hon ble court has held as under: 14. Any documentary evidence by way of an electronic record under the Evidence Act; in view of Sections 59 and 65A, can be proved only in accordance with the procedure prescribed under Section 65B .- Section 65B deals with the admissibility of the electronic record. The purpose of these provisions is to sanctify secondary evidence in electronic form, generated by a computer. It may be noted that the section starts with a non obstante clause. Thus, notwithstanding anything contained in the Evidence Act, any information contained in an electronic record which is printed on a paper, store ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 65 of the Evidence Act shall yield to the same. Generalia specialibus non derogant, special law will always prevail over the general law, it appears, the Court omitted to take note of Sections 59 and 65A dealing with the admissibility of electronic record, Sections 63 and 65 have no application in the case of secondary evidence by way of electronic record; the same is wholly governed by Sections 65A and 65B. To that extent, the statement of law on admissibility of secondary evidence pertaining to electronic record, as stated by this Court in Navjot Sandhu case, does not lay down the correct legal position. It requires to be overruled and we do so. An electronic record by way of secondary evidence shall not be admitted in evidence unless the requirements under Section 658 are satisfied. Thus, in the case of CD, VCD, chip, etc., the same shall be accompanied by the certificate in terms of Section 65B obtained at the time of taking the document, without which, the secondary evidence pertaining to that electronic record, is inadmissible. 8.2 The Hon ble Supreme Court in the case of Arjun Panditrao Khotkar Vs. Kailas Kishanrao Goratyal reported as 2020 SCC 1 SC has upheld the above f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s exchanged between importer and supplier of goods and statements of director of importer companies is not sustainable when his statements recorded on various occasions are conflicting and the e-mails have not been the relied upon documents. Same are the facts of the present case. The relevant para reads as: Valuation (Customs) - Undervaluation of imported tyre - Enhancement of value of imported goods solely based on parallel quotations/invoices existed on e-mails exchanged between importer and supplier of goods and statement of Director of importer companies, not sustainable when his statements recorded on various occasions conflicting and such e-mails never made part of Relied upon Documents and also not admissible in evidence in absence of compliance of provisions of Sections 138C and 139 of Customs Act, 1962 Tyres are regularly imported all over country and, therefore, Department could have easily garnered evidence of contemporaneous imports which it admittedly did not do In absence of any contemporaneous import data/NIDB data of identical or similar items or any allegation of buyer and seller being related or any extra payment made by importer, declared value cannot be rejecte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sis of the transaction value. Therefore, before rejecting the transaction value as incorrect or unacceptable, the Department has to find out whether there are any imports of identical goods or similar goods at a higher price at around the same time. Unless the evidence is gathered in that regard, the question of importing Section 14(1A) does not arise. In the absence of such evidence, invoice price has to be accepted as the transaction value. Invoice is the evidence of value. Casting suspicion on invoice produced by the importer is not sufficient to reject it as evidence of value of imported goods. Under- valuation has to be proved. If the charge of under-valuation cannot be supported either by evidence or information about comparable imports, the benefit of doubt must go to the importer. If the Department wants to allege undervaluation, it must make detailed inquiries, collect material and also adequate evidence. When under-valuation is alleged, the Department has to prove it by evidence or information about comparable imports. For proving under-valuation, if the Department relies on declaration made in the exporting country, it has to show how such declaration was procured. We ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the case of Xing International Vs. Commissioner of Customs, New Delhi, Imports reported as 2016 (339) ELT 283 (Tri. Del.) where the imported LED panels have been distinguished from LED TV panels (computer). As already hold above, there is no evidence about any chartered engineer report to technically hold that the goods of 19 live Bills of Entry of 2018 were complete TV in CKD condition. The Bills of Entry of 2015 and 2016 have also been questioned. For one of the Bill of Entry of 2016 there was the Central Excise report holding the imported goods are not complete TV. In the give circumstances it is held that department since has failed to prove that the goods are undervalued. The transaction value of commercial invoices has to be accepted in terms of Rule 14 of Valuation Rules. 8.10 Coming to the allegations about goods being branded, it is the case of the appellant that TV is not of Samsung brand rather it only the chip set which has to be installed while manufacturing TV, is of Samsung brand. There is no evidence of the department to falsify the same. On the contrary to prove that the 65 TV is unbranded appellant has supplied the copy of certificate issued by foreign supplier ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. 9. Issue No. 5 9.1 The allegations of the department are that the appellant has declared the imported goods as LED panels and parts of TV unbranded, however on the examination the goods were found to be LED curved panels of Samsung brand. The brand was embossed on a chip in the consignment and the brand stickers were also affixed on the packing material of the consignment. Since the observation falsifies the declaration, it becomes the case of suppression of material facts and the extended period of limitation is mentioned to have been rightly invoked. On the contrary the submissions of appellants have been that the LED panels were unbranded. Th ..... 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