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2021 (11) TMI 960 - AT - CustomsMisclassification and misdeclaration of imported goods - 12 mm Pixel LED - prohibited goods - to be classified under 85411000 or under 94053000? - benefit of exemption notification no. 24/2005 (S.No. 23) - HELD THAT:- It is found strange that having concluded that there is no heading for light fittings of LED under Chapter 85, the learned Commissioner (Appeals) concludes that they are excluded from Chapter 94 by virtue of Chapter note 1(f) which states that lighting fittings covered by Chapter 85 are excluded from Chapter 94. If the lighting fittings in question are not covered by Chapter 85, evidently, they are not excluded by virtue of Chapter note 1(f) of Chapter 94. Having come to this contradictory conclusion, the learned Commissioner (Appeals) held that the lower authority should not have applied Rule 2(a) because Rule 1 provides an answer. As is evident from the learned Commissioner (Appeals) findings itself Rule 1 does not answer the question because Chapter note 1(f) to Chapter 94 which the learned Commissioner relied upon only excludes lighting fittings falling under Chapter 85 and the learned commissioner finds that there is no heading for lighting fittings of LEDs in Chapter 85. Nature of the goods that are imported - HELD THAT:- Although they were declared as LEDs, on examination, they were found to be not individual LEDs but strands of 50 LEDs each. Such strands of LEDs are used for decoration, etc. but one needs to attach the adapters and connectors to the strings of LEDs. There were no adapters in the consignment and therefore, they were incomplete. Learned adjudicating authority has correctly applied Rule 2(a) to conclude that they were classifiable as Lighting sets of a kind used for Christmas trees 94053000. The classification of the goods by the Commissioner (Appeals) needs to be set aside and the classification by the original authority needs to be restored. Exemption notification no. 24/2005-Cus (S.No. 23) - HELD THAT:- Evidently, goods falling under heading 8541 are exempted and not goods falling under 94053000. Since it is held that the goods in question are classifiable under 94053000, the benefit of this exemption notification does not apply. Confiscation of goods - imposition of penalty - HELD THAT:- It is evident that Section 10 deals with the functions of the Bureau of Indian Standards and clause (p) mandates it to perform any other functions as may be prescribed. Similarly, Rule 13 deals with the functions of the bureau. Neither Section 10 nor Rule 13 authorise the imposition of any controls over imports as has been done in the CRO 2012. In fact, neither the Bureau of Indian Standards Act, 1986 itself nor the Bureau of Indian Standard Rules, 1987 have any provision to regulate imports or to impose restrictions on imports. Therefore, it is doubtful whether any restrictions on imports imposed under the CRO issued under the BIS Act, 1986 can be considered as “restriction on imports under any other law for the time being in force.” Section 111(d) must be read with the CRO read with Section 10 (1) (p) of the BIS Act and Rule 13 (fa) of the BIS Rules and neither the section nor the Rule nor the parent Act provide for restricting imports or laying down standards for imports. The CRO imposed restrictions not under the law but beyond it. In the present case, the importer declared the imported goods as LEDs and on examination they were found to be LEDs in strands of 50 each. The importer claimed a classification and consequentially the benefit of an exemption notification in its self-assessment while the officer re-assessing the goods classified them under a different heading and consequently found that the exemption notification was not available. The learned Commissioner (Appeals) agreed with the importer and we have, in this order, found that the decision of the Commissioner (Appeals) was not correct - the description in the Bill of Entry can, at best, be termed incomplete or vague and cannot be called wrong. What were imported were the LEDs though they were in strands. The impugned goods are not liable for confiscation under section 111(d) or 111(m). The provisions related to redemption become, consequently, irrelevant. Further, no penalty can be imposed under section 112 - Appeal allowed in part.
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