TMI Blog2023 (2) TMI 618X X X X Extracts X X X X X X X X Extracts X X X X ..... with the officer under the Customs Act 1962. An illustrative list of such situations would include cases wherein a Show Cause Notice has been issued; bill of entry has been provisionally assessed under Section 18 of the Act ibid; the matter is pending before the Special Valuation Branch of the Customs Commissioner for the purpose of valuation of the goods in question; or the proper officer has held the pre-notice consultation with the applicant in terms of the proviso of subsection (a) of Section 28(1) of the Customs Act, 1962. Therefore, in cases, such as the extant case, wherein an officer of customs is engaged in an investigation that may result in formulation of a question that would be posed before another competent officer would not qualify as pending before an officer . The contention of the Principal Commissioner of Customs (Preventive), New Delhi is rejected. Eligibility for taking benefit of Customs Notification No. 50/2017-Cus. dated 30.06.2017 - HELD THAT:- Emergency LED Light is fundamentally a type of LED light, albeit a value-added one. Further, Emergency LED light cannot be excluded from scope of entry referring to LED Light for want of anything specific ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lusion/ exclusion on the variety of LED Bulb/ Lights/ Fittings. Any light or bulb which has the technology of LED, i.e. Light Emitting Diode, shall be classified under the category of LED Bulb/ Light. Therefore, the emergency bulb which has the technology of LED shall be undoubtedly considered as LED Emergency Bulb. 3.2 The demand of LED Emergency Bulb has increased in the past few years especially in small cities and villages as it provides light backup for some time when the power is gone; and therefore, the Applicant has expanded its manufacturing towards LED Emergency Bulb/ Light in the past two years. As stated above the characteristic of the said bulb is that when there is supply of power/current, it will light up and when the power/current stops, it will still remain illuminated with the essential property of power backup for some hours. For the said purpose, the applicant installs one Lithium Ion Cell inside the LED Bulb, which gives it the essential characteristic of power backup. The said product is sold in the market as Emergency LED Bulb or Inverter LED Bulb, which provides the backup for 3-4 hours. 3.3 The Lithium Ion Cell is an essential part of the LED Emer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Description of goods Standard rate Integrated Goods and Services Tax Condition No. (1) (2) (3) (4) (5) (6) 471. Any Chapter All parts for use in the manufacture of LED lights or fixtures including LED Lamps 5% - 9 Condition :- 9 If the importer follows the procedure set out in the Customs (Import of Goods at Concessional Rate of Duty) Rules 2017 As amended by Notification No. 02/2021-Cus. dated 01.02.2021: (76) against S. Nos. 471, 472 in column (4), for the entry, the entry I0% shall he substituted; 3.6 The Applicant under the above Exemption Notification has imported some consignments, which were duly examined and cleared by respective proper officers. However, on a much later date, after import of several consignments, the department [Principal Commissioner of Customs (Preventive), New D ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . New Delhi sent their comments vide letter dated 26.04.2022, wherein it was mentioned inter alia that the Li-Ion Cell is not an essential part of LED bulb and it acts as an extra feature for LED Bulbs. Since the benefit of the S. No. 471 of the Notification No. 50/2017-Cus dated 30.06.2017 was granted on the parts for use in the manufacture of LED lights, therefore, being a non-essential part, benefit is not available on Lithium Ion Cell. Further, the exemption notifications are subject to strict interpretation, therefore, benefit of S.No.471 is available for manufacture of LED lights and not for LED emergency light. Therefore, an enquiry was initiated against the M/s H.Q. Lamps Manufacturing Co Ltd and documents were sought from them vide letters dated 07.02.2022 and 21.02.2022. The importer had submitted Bills of entries on which benefits of concessional rate has been availed. The matter was still under investigation. 6. In this regard, the applicant vide their letter dated 05.05.2022 submitted that no enquiry or investigation was pending against the applicant before any officer of customs in respect of the clarification sought in the said application. It was stated that lett ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reventive), New Delhi and scope and applicability of proviso (a) to Section 28 (I)-2 of Customs Act 1962; and thereafter if the application is admissible; (ii) discussion regarding the question posed for advance ruling on the basis of submissions made and comments received. 10. On the question of admissibility, it was noted that the applicant has declared Principal Commissioner of Customs, ACC (Import), New Delhi and Commissioner of Customs, Patparganj Other ICDs including ICD Garhi Harsaru, as the concerned Principal Commissioner/ Commissioner of Customs. However, the applicant has mentioned that a communication was received from the O/o Principal Commissioner of Customs Preventive, New Delhi seeking documents for the scrutiny of exemption benefit being claimed by the applicant pertaining to the imports made since 2017. Noting that the said consignments were imported through ICD Garhi-Harsaru, falling under the jurisdiction of Commissioner of Customs, Patparganj Other ICDs, comments have been initially sought from (i) Principal Commissioner of Customs, ACC(Import), New Delhi, and, (ii) Commissioner of Customs, ICD Patparganj and separately from the Principal Commissioner of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Commissioner of Customs Preventive vide their letter dated 24.06.2022 and 29.06.2022, inter alia, submitted that the question raised in the application was already pending in the applicant s case before their office; that the office of the Pr. Commissioner of Customs Preventive, New Delhi was made as the proper/jurisdictional officers for the purpose of overseeing the benefits under the IGCR Rules, 2017; and also requested for another opportunity for Personal Hearing in the matter before deciding the case. The requested was granted and second personal hearing was held on 12.07.2022. 11.1 In the personal hearing held on 12.07.2022, the authorized representative of the applicant reiterated her earlier submissions. The representative of the concerned Principal Commissioner of Customs, ACC (Imports), New Delhi concurred with the contention of the applicant. The representative of the Principal Commissioner of Customs (Preventive), New Delhi argued that the application merits rejection under Section 28-I (2) of the Act ibid, in view of the enquiry initiated by their office, who are vested with the powers of the proper officer under the IGCR Rules, 2017. On the merits of the case, it i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nquiry was initiated against M/s H.Q. Lamps Manufacturing Co. Ltd. and documents were sought vide letters dated 07.02.2022 and 21.02.2022. Thereafter, summon were issued to the importer on 29.04.2022 and 10.05.2022. It was submitted that the matter was still under investigation at the time of advance ruling application being filed. 13.3 The subject matter of investigation by the officers of Principal Commissioner of Customs (Preventive), New Delhi is to check whether the importer has used the imported goods for intended purpose or not. In the instant case, it is the submission of the Principal Commissioner of Customs (Preventive) that the jurisdictional officer not being satisfied with the manner of the utilization of the goods, called for documents and enquiry was initiated against them. In this matter when the importer was asked to submit the documents vide their office letter dated 21.02.2022, he had sought time vide letter dated 11.03.2022 to submit the documents. Further the importer had not submitted the documents even after issuance of two letters and summons to tender the statement and submit documents; and meanwhile filed the application before the CAAR, New Delhi. Ther ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of any show cause notice atleast as yet. 13.6 On the basis of the careful examination of the relevant provisions of the Customs Act, Rules and CAAR Regulations, 2021, I am on the considered view that an application may be considered pending before any officer of customs only if it is pending before an officer in formal manner before an officer who is competent to answer the said question in terms of specific powers vested with the officer under the Customs Act 1962. An illustrative list of such situations would include cases wherein a Show Cause Notice has been issued; bill of entry has been provisionally assessed under Section 18 of the Act ibid; the matter is pending before the Special Valuation Branch of the Customs Commissioner for the purpose of valuation of the goods in question; or the proper officer has held the pre-notice consultation with the applicant in terms of the proviso of subsection (a) of Section 28(1) of the Customs Act, 1962. Therefore, in cases, such as the extant case, wherein an officer of customs is engaged in an investigation that may result in formulation of a question that would be posed before another competent officer would not qualify as pendin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s an LED bulb. I note that it is in the nature of commercial progress that value added goods are envisioned and supplied in the market. While it is possible to restrict the scope of any goods to exclude value added sub-category thereof under any statute, particularly taxation statute, in the absence of such explicit exclusion reference to any goods must include value added categories thereof. In the instant case, emergency lights are lights; and LED emergency lights are LED lights, since emergency lights are neither classified elsewhere nor specifically excluded from the scope of the notification entry. 14.5 The second question is whether Li-ion cell is essential to the functioning of LED Emergency light? The AR of the applicant has submitted that the product being sold by them in the market is LED Emergency Light, which is a LED Bulb with the Li-Ion Cell that provides backup for 3-4 hours. Without the Li-ion cell, the product is not an Emergency bulb as marketed and sold by the applicant. Therefore, Li-Ion Cell is an integral and essential part of the Emergency LED Bulbs. I accept the contention of the applicant that in the instant case Li-ion cell is sine qua non for emergency ..... X X X X Extracts X X X X X X X X Extracts X X X X
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