TMI Blog2019 (4) TMI 37X X X X Extracts X X X X X X X X Extracts X X X X ..... t from its entire body, but by its tail. In any case, it cannot be dispute that even the built-in AM/FM receiver cannot play on its own on the AVR. It definitely will require connected speakers for that purpose. In the radio reception apparatus envisaged in the classification under CTH 8527, one important aspect is that such receivers will not only be able to receive signals, but also make playback without the requirement of any additional add-on speakers or other equipment. In the circumstances, we have no doubt in our minds that the premises on which the Department has homed in to bring in the classification of AVR and HTS under Chapter Heading 8527 cannot be sustained. Time limitation - Held that:- The investigations not having been done proximate to the import, but after a prolonged period without any palpable evidence of intention to suppress, mis-state or defraud, we are unable to agree with the invocation of extended period in the Show Cause Notice. This being so, the demand, at least for the predominant period covered in the Show Cause Notice, cannot be sustained. Appeal allowed - decided in favor of appellant. - Appeal Nos.: C/42127 & 42129/2014 - Final Order No ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... speakers. (vii) It therefore appears that appellants, to suit their needs, have claimed that AVRs/HTSs are amplifiers/multiple loudspeakers with an intention to evade payment of appropriate Customs duties. AVR/HTS are therefore to be classified under CTH 8527 as radio broadcasting receiver and leviable to Additional Duty of Customs under the Central Excise Tariff 8527 on the basis of Retail Sale Price (RSP) in terms of Notification No. 14/2008 CE (NT) dated 01.03.2008 and 49/2008 CE (NT) dated 24.12.2008 as amended under Section 4A of the Central Excise Act, 1944. (viii) Shri. Sukanto Mukherjee, Senior Manager, (Supply Chain - Lifestyle Division), M/s. Harman International (India) Pvt. Ltd., Bangalore has confirmed that AVR/HTS are correctly classified under CTH 8527. (ix) Levy of appropriate Customs duties based on MRP have therefore been suppressed from the Customs Department and also mis-declaration in Bills-of-Entry leading to contravention of provisions of Section 46(4) of the Customs Act, 1962 and consequent evasion of Customs duties. (x) Hence, valuation of AVR/HTS imported by the appellants based on transaction value needs to be rejected since such goods hav ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Finance Act, 2011 with effect from 08.04.2011. Therefore, it is submitted that major portion of the demand is barred by limitation. In the absence of any tangible material to show that there was mens rea and wilful intent to evade payment of duty by suppression, etc., it is submitted that the larger period of limitation cannot be invoked in the present case. In this regard he relied upon the judgement of the Hon ble Supreme Court in the case of M/s. Padmini Products Vs. Collector of Customs 1989 (43) E.L.T. 196 (S.C.) which has been subsequently followed by the Hon ble Supreme Court, the Hon ble High Courts and the Tribunal on the proposition found at paragraph 8 of the said judgement. (ii) Admittedly, in the instant case, most of the imports were earlier to 08.04.2011, when the era of self-assessment was introduced into the Customs Act, 1962. Therefore, power of assessment for those Bills-of-Entry was the sole prerogative of the assessing officer. It is submitted that on satisfaction of the proper officer of Customs, after verification of import documents, assessment was done and the goods were allowed to be cleared on an out-of-charge order passed by the proper offic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... views of the Department of Electronics before rushing to a conclusion. Furthermore, the lower authority s contention that the Department of Electronics refers to a different statute of laws is untenable and as already stated in the appeal grounds, the lower authority has failed to explain how an item considered as amplifier will be different for the Customs Tariff. (v) Additionally, the importer, in the course of its submissions before the lower authority on 07.05.2014, also submitted that the product in question was being imported by other competing brands in other ports and no such issues were raised on classification and import data available showed all such imports being classified under Chapter 8518. There is no considered finding on such a plea made before the lower authority. (vi) The issue seems to be concluded on the strength of the Tribunal judgement in the case of M/s. Logic India Trading Co. Vs. C.C., Cochin 2016 (337) E.L.T. 65 (Tri. Bang.) which has been affirmed by the dismissal of the civil appeal by the Hon ble Supreme Court reported in 2016 (342) E.L.T. A34 (S.C.) which has also been subsequently followed by the Tribunal in the case of M/s. G ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ding 8518. (iv) The primary function of the said items is basically as a reception apparatus for radio broadcasting and is therefore, only a radio receiver. (v) Ld. AR drew our attention to paragraph 14 of the impugned Order where the adjudicating authority has found that AVR imported by the appellants is not just an amplifier, but is having more features which are technically superior than the function of amplifying sound/audio. That it is having the function and hardware software for processing video and reading the storage unit with USB connection. That it is also having the facility and functionality to receive radio signals of both FM and AM. Therefore it cannot be just considered as an amplifier. (vi) US Advance Ruling as classified similar items manufactured by M/s. Onkyo, USA and other companies in USA as falling under HTSUS 8527. Since the same Heading is there for Customs Tariff, the Advance Ruling will be applicable even for the impugned goods. (vii) The adjudicating authority has gone into the technical aspects of video processing technology and has also taken inputs from Wikipedia and the website of the appellant. (viii) In any case, the item which imp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4.2011, the relevant Bills-of-Entry were put up to the group for assessment and thereafter cleared. 8. As narrated in the Show Cause Notice, the investigations commenced with the statement of Shri. M. Barani Kumar, Director of the appellant on 09.11.2012. This was followed up by a statement of Shri. M.A. Dhandapani, Managing Director of the appellant on 02.01.2013, another statement of Shri. M. Barani Kumar on 25.04.2013 and the statement of Shri. Sukanto Mukherjee, Senior Manager, (Supply Chain - Lifestyle Division) of M/s. Harman International (India) Pvt. Ltd., Bangalore on 30.04.2013. In between, there have been a number of letters from the appellants forwarding copies of Bills-of-Entry, invoices, etc., that may have been required by the investigating officers. 9.1 The basic allegation by the Department that has culminated in these proceedings is that AVR and HTS are primarily in the nature of reception apparatus for radio broadcasting. Since they have the facility of AM/FM radio receiver with multiple Audio/Video players and Audio/Video transmission capabilities, therefore, it would come only under CTH 8527. The adjudicating authority has taken inputs from Wikipedia too ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... AM/FM receiver or reception apparatus, which would require to be classified under CTH 8527. 10.1 All the same, even from the findings of the adjudicating authority discussed supra, what comes forth is that the said equipment is designed to receive various types of signals from the equipment or sources of such signals with features like Dolby decoder, DTS decoder, S-Video, THX Processing, Qdeo Video Processing, HQV Video Processing, MultiEQ, etc., and amplify/enhance the quality and output of such signals to be further played on by the speakers. It is in this sense that the AVR is a receiver for such signals for further amplification/enhancement. 10.2 The adjudicating authority has also conceded in paragraph 14 that the AVR has function and has the hardware and software for processing the video, reading the storage unit . Even by common sense, it would be evident that the M/s. Onkyo (appellants herein) would not be packing so many functions into one device like the AVR and loaded hardware and software only to receive broadcasting signals with the AM/FM receiver mode. Obviously, the AVR is designed to have the facility and functionality to receive signals from other au ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mum Gain Volume Circuitry and a host of other processing and connection features. So also, the surround Home Theatre Systems (HTS) is nothing but a channel receiver and speaker packaged with front/centre, surround, surround back and sub-woofer speakers with an Amplifier Section and a Video Section. As in the case of AVR, there is also an add-on Tuner Section for AM and FM with forty stations. One swallow , as the old adage goes, does not a summer make . So also, one add-on AM/FM tuner cannot re-classify an AVR or HTS into a mere AM/FM receiving apparatus. 13.1 Considerable reliance has been placed on the ruling of the USA Advance Ruling Authorities under the HTSUS for similar products manufactured by M/s. Onkyo, USA. The said ruling is, in any case, in the form of an Advance Ruling that too of a foreign country. Hence, the same will not be binding or have any persuasive effect on this forum. 13.2 In any case, it cannot be dispute that even the built-in AM/FM receiver cannot play on its own on the AVR. It definitely will require connected speakers for that purpose. In the radio reception apparatus envisaged in the classification under CTH 8527, one important aspect is that s ..... X X X X Extracts X X X X X X X X Extracts X X X X
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