JULY 01, 2024

By S K Rahman, IRS, working as AR at Delhi CESTAT

THE CESTAT has passed Final Order No. No's. 55814-55820/2024-dt 27.05.2024 2024-TIOL-600-CESTAT-DEL in the cases of M/s. Banke Bihari Electronics Pvt. Ltd. on the issue of import of calculators in Completely Knocked Down (CKD) condition ordering that the parts of calculators imported shall be combined/ clubbed and assessed as Calculators under HSN 84701000 and upheld the demand of Anti-Dumping Duty (ADD) leviable as per Notification No 24/2015 Customs(ADD) dated 29-05-2015 for imports of calculators from China.

2 In these cases there were seven Customs Appeal No. 50856-62 of 2020 filed by M/s. Banke Bihari Electronics Pvt. Ltd and its Director & Authorised Signatory ; M/s. Zippo Mobiles Pvt. Ltd. and its Director; Proprietor of M/s. Radhey Enterprises and Proprietor of M/s. Delhi Transport Co. against Order-in-Original No. 03/2020/MKS/Pr. COMMR/ICD-IMPORT/TKD dated 16.01.2020 passed by Principal Commissioner of Customs (Import) Inland Container Depot, New Delhi.

3 The Appellant M/s. Banke Bihari Electronics Pvt. Ltd has imported parts of calculators such as Printed Circuit Board for calculators with display, pressing machines,screws, button cells, sponge, poly bag and colour box etc vide a Bill of Entry dt 20-02-2018. This Bill of Entry was filed on the basis of a Commercial Invoice No. JM20180118 dated 16.01.2018 received from the Chinese Supplier M/s. Panda Technologies Ltd. China. The Appellant M/s Zippo Mobiles also imported parts of calculators such as plastic front covers and plastic back covers of calculators vide a Bill of Entry dated 20.02.2018 as per Invoice No. PAN20180118 for clearance of the same. After few days Appellant M/s Zippo Mobiles filed a second Bill of Entry dated 19.03.2018 for import of calculator front and back cover and cartons on the basis of Commercial Invoice No. PAN20180210 dated 08.02.2018. After few days Appellant Banke Bihari also imported another consignment of parts of calculators namely PCBs with display,screw, cell,poly bags, colour box, sponge on the basis of Commercial Invoice No. JM20180207 dated 03.02.2018 and filed a Bill of Entry dated 24.03.2018.

4 The allegation of Revenue is that complete calculators were imported by the Appellant M/s. Banke Bihari Electronics Pvt. Ltd with complicity of the Appellant M/s Zippo Mobiles in the guise of parts of calculators so as to evade anti-dumping duty leviable on calculators @ USD 1.22 per piece. A Show Cause Notice dated 22.04.2019 was issued to all the appellants, calling upon them jointly and severally to the show cause why anti-dumping duty should not be imposed in respect of goods imported through the above mentioned Bills of Entry

5 The Principal Commissioner has passed the Order-in-Original dated 16.01.2020 holding that the parts of calculators imported under the four Bills of Entry shall be clubbed as calculators in CKD condition and so anti-dumping duty shall be imposed upon the calculators in terms of the notification dated 29.05.2015.

6 APPELANT: The appellants have filed appeals against the impugned Order-in -Original dated 16.01.2020 on the following grounds

i. M/s. Banke Bihari Electronics Pvt. Ltd and M/s. Zippo Mobiles Pvt. Ltd are two distinct entities incorporated under the Companies Act and, therefore, it was not permissible to club their imports purchased and cleared on payment of duty with their own funds;

ii. They have not imported keypads and plastic buttons which constitute vital parts of a calculator

iii. The anti-dumping duty on calculators in CKD condition or parts thereof can not be levied under as the said Notification dated 29.05.2015

7 REVENUE: The arguments by Revenue are as follows :

i. The parts of calculators under the aforesaid four Bills of Entry and their quantities imported indicated almost matching quantities for assembly of complete calculators and there was import of even packing material for calculators as well as the two pressing machines for calculators

ii. The Bill of Entry dated 20.02.2018 filed by appellant M/s. Banke Bihari Electronics Pvt. Ltd. and Bill of Entry dated 20.02.2018 filed by appellant M/s. Zippo Mobiles Pvt. Ltd. refers to same commercial Invoice No. JM20180118 dated 16.01.2018 of the same supplier M/s. Pandas Technology Ltd., Hong Kong and the said goods have been imported under same IGM/Gateway IGM and also under Bills of Lading having the same date.

iii. The goods covered under the other two Bills of Entry dated 24.03.2018 and dated 19.03.2018 have also been imported from the same supplier M/s. Pandas Technology Ltd., Hong Kong against Commercial Invoice No. JM20180207 dated 03.02.2018 (by M/s. Banke Bihari Electronics Pvt. Ltd.) and against Commercial Invoice No. PAN20180210 dated 08.02.2018 (by M/s. Zippo Mobiles Pvt. Ltd.). Both the Bills of Entry were covered under the same IGM No. and date.

iv. On inquiry, the calculator parts imported by M/s. Zippo Mobiles Pvt. Ltd. under Bill of Entry dated 20.02.2018 were found to be stored at the warehouse of M/s. Banke Bihari Electronics Pvt. Ltd.

v. The import of the consignments of parts of Calculator in the present case under aforesaid four Bills of entry has been clearly arranged and managed by Shri Dinesh Udhwani. His father Shri Ashok Udhwani is the Director M/s. Banke Bihari Electronics Pvt. Ltd and his brother-in-law Shri Ashish Kumar is the Director of M/s. Zippo Mobiles

vi. The intention of said import was for the purpose of assembly of complete calculators. The above parts have NOT been imported for trading.The parts like front and back cover for calculators would be for specific models of calculator and cannot be possibly traded in market as general parts. The parts are deliberately imported under separate Bills of entry, by splitting up the parts, so as to evade Anti-dumping duty.

vii. The imported Printed Circuit Board Assembly (having in-built cell bracket) connected with imported display along with imported button cell can be assembled to make a calculator. These imported parts provide the essential character of the complete or finished article. These imported parts make a complete calculator in CKD condition, as per Rule 2(a) of General Rules for the Interpretation of the Harmonized System.

8 The CESTAT vide its, Final Order No. No's. 55814-55820/2024-dt 27.05.2024 2024-TIOL-600-CESTAT-DEL has concluded (ref para 23 of the Order) that it is more than apparent that the appellants have imported parts of calculator through Bills of Entries so as to assemble the parts to form the calculator only to avoid Anti-dumping duty.

9 Take aways from the above CESTAT, Final Order No. No's. 55814-55820/2024-dt 27.05.2024 2024-TIOL-600-CESTAT-DEL are :

i. When parts of an article are being imported, it is required to be examine whether they constitute essential character of complete article in terms of Rule 2(a) of General Rules for the Interpretation of the Harmonized System

ii. One has to examine what could be the intention of bringing an article in Completely Knocked Down condition to assemble in India for example, different CTH classification for parts and different CTH for complete article with difference in rate of duty or benefit of notification available if imported as parts or any duty such as Anti-dumping duty is being avoided/evaded by importing as parts.

iii. It is not true that in all such imports of goods in CKD condition there would be an intention detrimental to the interests of Revenue. Only in such cases where there is an intention to avoid/evade duty, the above case law is applicable. The facts and circumstances of each case by case are required to be examined.

(The views expressed are personal and not in official capacity)

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