TMI Blog2023 (2) TMI 619X X X X Extracts X X X X X X X X Extracts X X X X ..... orage which can be done by five different means, one of which is charging using in-built solar panel. The power so generated can be used for several purposes and not only for using the LED lamps built into it the goods. Thus, they have multiple inputs and multiple output options. The imported goods can be used regardless of which input source is used or what the output purposes are but they cannot be used without the accumulator. Therefore, in our considered view, they deserve to be classified as accumulators under CTH 8507. Whether the classification of the imported goods under IGST. S. No. 234 of Schedule I of the IGST Notification 1/2017 covers solar power based devices is correct? - HELD THAT:- The notification does not place any restriction of the Customs Tariff Heading and it applies so long as such devices fall under Chapter 84 or 85 of the Customs Tariff. Evidently, the goods falling under 8507 would also be entitled to classification under Schedule I at S. No. 234 if they are solar power based. There can be no manner of doubt that they are solar power based. The reason this classification was not accepted by the adjudicating authority is that they are not SOLELY based ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ong with interest under Section 28AA. Penalty of Rs. 22,60,000/- was imposed under Section 112 and penalty of Rs. 1,00,000/- was imposed under Section 117 of the Act. 2. The facts of the case, in brief, are that the appellant imported goods described as Portable Solar Home Electric Light HANS 300 and HANS 150 , imported goods under five bills of entry classifying them under CTH 85131010 and S. No. 234 of Schedule I of IGST Notification No. 1/2017. At this stage, it needs to be pointed out that a vast majority of the goods which are imported into the country are cleared on the basis of self assessment of duty by the importer under Section 17(1) while some goods are re-assessed to duty under Section 17(5). If the goods are cleared on the basis of self assessment, the bills of entry are audited after clearance and this process is commonly referred to as Post Clearance Audit. 3. CTH 85131010 reads as follows: 85.13 Portable electric lamps designed to function by their own source of energy (for example, dry batteries, accumulators, magnetos), other than lighting equipment of heading 85.12. 851310 - Lamps; 85131010 Torch . 85139000 - Parts 4. During Post C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ule I of this notification. 8. A show cause notice dated 7.2.2020 was issued to the appellant and after considering the reply submitted by the appellant the impugned order was passed. 9. In its reply, the appellant took the stand that not only are the goods are classifiable under S. No. 234 of Schedule I of the IGST notification but they are liable to be classified under CTH 85013120 and, therefore, not only was the appellant not liable to pay the IGST at higher rate but it was also eligible for refund of the excess basic customs duty paid by wrongly classifying the imported goods under 85131010. The reason for this assertion is that, according to the appellant, the main function of the imported goods is that of solar generator and neither are they solar lamps nor are they accumulators. Having generated solar power, it has to be stored and it is being stored in the battery. The other means of charging the battery are only alternative means of charging provided in them. The imported goods are, therefore, to be classified as electric generators under 8501. 10. The prayer in the appeal before us is as follows: (i) Set aside the impugned OIO dated 14.08.2020 passed by the C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ariff they fall. The benefit of S. No. 234 of Schedule-I will still be available to the appellant. (iii) The imported goods are not classifiable under 85076000 and are also not classifiable under S. No. 139 of Schedule IV of IGST Notification No. 1/2017. This heading covers accumulators based on lithium-ion battery which is one of the parts of the goods in dispute. (iv) The essential feature of the goods is generation of DC power using solar energy which can be used to charge mobiles or run other electrical appliances such as computers and televisions in addition to using the LED lights. Therefore, the essential feature of the imported goods being that of the generator, appropriate CTH is 85013120 which reads as follows:- Tariff Item Description Unit Rate of Duty Preferential Area Rate 85013120 DC generators U 10% (v) Revenue has mis-construed the imported goods as accumulators. Their main function of the product is that of solar power generation and storage of the power so generated is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on of the Chartered Engineer and examining the literature of the imported goods on the website of the appellant which shows the nature of the imported goods. (ii) They are meant to store power, generate electricity with in-built solar panel and provide light through LED lamps. The power can be sourced through five different means for storage including through the in-built solar panels. The usage of the power so produced is through the LED lights and also through the USB ports and 12 volt socket. The power so stored can be used not only for light but also to run several electrical appliances. Thus, the heart of the imported goods is the accumulator and the solar panel which generates the electricity and the LED lights which emit light are not the main features. In case of composite machines, classification under Customs Tariff Heading should be done as per that portion of the machine which gives it the essential characteristics. In the imported goods, the solar panel is only one of the five means of charging and the light is one of several uses to which they can be put to. They are also sold based on capacity of storage of electricity of 300 watt hours or, as the case may be, 150 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -300 hours of light (Maximum) and 30 Mobile phone charges (Maximum) Can power larger electrical devices such as computers and televisions. Can be charged five ways:- (i) HANS Solar Briefcase (sold separately) (ii) HANS Free Electric Bike (sold separately) (iii) Human Power Generator (HPG) (iv) Built in solar panel (included) (v) AC Charging cord (included) Long lasting lithium battery Light weight (4 kg) and portable. Rugged, durable construction. 12 years warranty. 1) USB Port - SV up to 2.4 A 2) 12V Car Port -11.5-16.8V (11A max) 3) 3x1W 1x2w lights - 300 hours max 4) AC Charger (3A.50W) - 7-8 hours 5) Solar - 66 hrs (4.5w integrated solar panel) 7-10 hrs (Integrated-60W optional solar Briefcase) 6) Lifecycles - 1000 Cycles to 80% 6) Rated Capacity - 1000-Cycles to 80% 7) Cell Type - Lithium-ion 16. The three competing entries for classification under the Customs Tariff are: 85131010 - Torch 85076000 - Lithium-ion accumulator 85013120 - DC Generators 17. In other words, as per the original classification in the bills of entry etc., the imported goods in question are solar lamps. If Revenue s contention is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... applies so long as such devices fall under Chapter 84 or 85 of the Customs Tariff. Evidently, the goods falling under 8507 would also be entitled to classification under Schedule I at S. No. 234 if they are solar power based. There can be no manner of doubt that they are solar power based. The reason this classification was not accepted by the adjudicating authority is that they are not SOLELY based on solar power and other power can also be used charged the devices. In our considered view, the adjudicating authority has erred in coming to this conclusion because the Notification does not say devices based solely on solar power but says solar based devices . It does not in any way forbid the alternative sources of power to support them. Simply because there are four other alternative means through which they can be charged, it does not mean that the imported goods are not solar power based devices. Therefore, the imported goods merit classification under 234 of Schedule I of Notification 1/2017. Consequently, the demand for IGST differential duty along with interest cannot be sustained. 20. As we have held that the essential nature of the imported goods to be that of accumul ..... X X X X Extracts X X X X X X X X Extracts X X X X
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