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2023 (3) TMI 1178 - AT - CustomsBenefit of exemption from duty - Classification of imported goods - 12V SMPS consisting of Main PCB, lightening protector, DC/AC cables, fuse/fuse holders and others - Customs Notification No.21/2005-Cus. dt. 1.3.2005 and Notification No.6/2006-CE dt. 1.3.2006 - goods sold on High Sea Sale basis - to be classified under CTH 85299090 or under CTH 85049090? Whether SMPS is an integral part of IFWT so as to make the parts of SMPS to be part of IFWT? - HELD THAT:- SMPS is intended to be used in Float-cum-charge mode as a regulated DC power source. It is simply an electrical power supply that incorporates a switching regulator to convert the electrical energy more efficiently. Though the UPS used for computers also do the same function, UPS has back up facility which is lacking in the case of SMPS. From the specifications, function and use, it cannot be said that SMPS are vital and integral part of IFWT. It is an option. After perusing the description of 12V SMPS as given in G.R as well as the images in service manual, there are no ground found to hold that IFWT cannot function without 12V SMPS. It is in the nature of energy supplying device which would regulate voltage flow of electricity. IFWT can function even if 12V SMPS is not connected to it. This means IFWT can function if directly plugged to an energy source. Thus there exists no doubt to hold that SMPS is not an integral part of IFWT. The goods imported cannot be considered as part of IFWT. The notification exempts parts, components and accessories of mobile handsets including cellular phones from customs duties when imported. In the case of STATE OF PUNJAB & OTHERS VERSUS NOKIA INDIA PVT. LTD. [2014 (12) TMI 836 - SUPREME COURT], the Hon’ble Apex Court was considering the issue under the Punjab Value Added Tax Act, 2005 where in the assessee, Nokia India Pvt. Ltd., had sold the cell phone along with battery charger as composite package and discharged lesser duty @4% on the charger. The appeal by the state that assessee has to pay tax @12.5% on the battery charger was allowed. In the said case, the Hon’ble Apex Court did not consider as to the interpretation of ‘accessory’ in terms of Notification No.21/2005-Cus. - Again, in the case of MEHRA BROS. VERSUS JOINT COMMERCIAL OFFICER [1990 (11) TMI 144 - SUPREME COURT], the Hon’ble Court was considering the issue of tax ability of seat covers under the Tamil Nadu General Sales Tax Act, 1959 - These decisions are distinguishable on facts. The decision of the Hon'ble Apex Court in the case of State of Punjab Vs Nokia India has been relied to counter the view taken by the Tribunal earlier with respect to the batteries. The issue in the case was in regard to a complete product in the nature of mobile phone charger. In the present case, the goods imported are parts of SMPS. It is already held that SMPS is not a part of IFWT. The goods imported cannot be considered as accessory as these parts are not used to increase the effectiveness or convenience of IFWT. It is thus held that the goods imported are neither parts nor accessories of IFWT and therefore cannot avail the benefit of notification. It is made clear that the issue of classification not addressed. The assessee’s appeal is dismissed.
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