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FM proposes to lessen tedium of TDS; reduces rates in many casesFM overhauls capital gains regime; to come into play from todayFM hikes exemption limit for long-term capital gain to Rs 1.25 lakh + hikes tax rate to 12.5% on specified financial assetsTourism: Temple corridors to be developed in BiharCGST - Finance Bill proposes to amend Sec 9 to take ENA out of purview of GST + inserts Sec 11A to regularise non-levy of tax on general practice in tradeCGST - Sub-sections to be inserted in Act to relax time-limit to avail ITC u/s 16(4) + New Sec 74A proposed to provide for common time limit for demand notices in fraud cases3.4% of GDP allocated as Capital expenditure to support infra sectorCGST - Proviso to be inserted in Sec 30(2) to provide for enabling conditions for revocation of registration + Amendment in Sec 39 to mandate return filing by TDS deductors even if there is no deduction in a particular monthIGST - Amendment proposed to prohibit refund of unutilised ITC on zero-rated supplyIncome tax - Finance bill revamps re-assessment regime againCustoms - Finance Bill proposes to amend Sec 28DA for acceptance of different types of proof of origin under FTAsFM hikes standard deduction to Rs 75K for new ITR regime + revises tax rates for all income slabs + Rs 7000 Cr revenue foregoneIncome tax - Search & Seizure cases - Block assessment is backBudget withdraws 2% equalisation levyFM reduces corporate tax rate for foreign companies to 35%FM proposes vivad se vishwas scheme + hikes monetary limits for filing appealsFM proposes 20% capital gains tax on short-term assets + listed financial assets held for more than one year to be classified as long-termGovt scraps TDS on Mutual Funds + decriminalises delay in depositing TDS + rationalisation of compounding of offences + revamps reassessment periodBudget proposes comprehensive review of I-T Act, 1961 + simplifies provisions for charities and TDSFM reduces customs duty on gold and silver to 6% + Nil BCD on nickel cathodeBudget proposes to reduce BCD on mobile phone and chargers to 15% + exempts 25 minerals from customs dutyFM exempts cancer medicines from Customs duty + amends BCD for various machinesFM proposes Rs 48 lakh expenditure outlay; 4.9% fiscal deficitFM announces Rs 1 lakh crore fund for developing space economyPromotion of Tourism - Vishnupad temple and Bodh Gaya temple corridors to be supportedFM announces over Rs 11 lakh crore capital expenditure in current fiscalGovt to invest in small Nuclear energy plants in partnership with private playersCentre to ask States to lower stamp duty for women purchasers of housesIBC - More Benches of NCLT to be set up to speed up recoveryFM spikes limit of Mudra loan to Rs 20 lakhsBudget offers financial aid to labour-intensive MSMEs in manufacturing sectorGovt announces 3 crore additional houses under PM SchemeGovt to secure Rs 15K loan for AP from multilateral agenciesGovt to frame new policy for all-round development of Bihar, Jharkhand and OdishaGovt to give one-month salary to all new recruits in formal sector through EPFOGovt to promote vegetable clusters closer to urban settlementsGovt to focus on productivity of agriculture with climate-resilient seedsFM allocates Rs 2 lakh outlay for PM's five schemes for job creation and farmersFM Nirmala Sitharaman presents 7th Union Budget in ParliamentBudget 2024: FM arrives at Parliament; Speech to begin at 11AMEconomic Survey 2023-24 - from GST PerspectiveUkrainian FM goes on tour to ChinaI-T- Additions framed u/s 69A are untenable where affidavits submitted by assessee's parents to explain source of cash deposits, were discarded by AO without consideration : ITATSurvey acknowledges productivity loss due to mental health disordersI-T- Short term capital gains returned by the assessee in terms of provisions of section 50 of the Act on assets held for a period of more than 36 months be treated as long term capital gains: ITATExpenditure on social services up from 6.7% to 7.8% of GDP: SurveyI-T-Additions framed u/s 68 are upheld where assessee is unable to prove genuineness of transaction involving purchase and sale of penny stock: ITATTrade deficit contracts to USD 78 bn from USD 126 bn in 2023I-T-Re-assessment is invalidated when there is no failure on part of assessee to make full and true disclosure of facts necessary for assessment: ITATCorporate profitability has peaked to 15-yr-old high between 2020-2023: SurveyI-T- When cash generated out of sales has been credited in the books of accounts, the provisions of Sec.69A could not be invoked: ITATBudget 2024: More relief for senior citizens & individual taxpayers on card; tweaking of capital gains tax likely; steady capital expenditure to stayI-T- If any amount invested is purely a strategic investment & for purpose of commercial expediency, then AO cannot hold such investments to be for non-business purpose: ITATGoogle backpedals on plan to scrap cookies from ChromeCus - For a HNWI individual, an expensive watch of 'Rolex' make would be his personal effect but same may not be the case if the person is of mere means - Pendant studded with diamonds not liable for confiscation: HCGovt amends Recruitment Rules for Debts Recovery TribunalGST - Even if no date, time or place of hearing is indicated in the notice issued, it was the duty of assessee to file his reply to SCN, which was admittedly received - Plea regarding violation of principles of natural justice cannot be countenanced: HCAbhinav Bindra conferred with Olympic OrderGST - Mismatch between value of e-way bills generated on portal and returns filed in Form GSTR-3B - Petitioner did not provide a comprehensive explanation - To remit sum of Rs.3.50 crores within six weeks - Matter remanded: HCHackers mercilessly hack Bangladesh PM’s website along with police portalsGST - Rule 30 of Rules, 2017 - Assessing officer ought to have issued summons and obtained clarification rather than estimating the outward supply value at 110% of purchase value - Order set aside and matter remanded subject to remit of 10% disputed tax demand: HCUS law-makers call for resignation of Secret Service chief in Trump assassination caseGST - Net ITC shown incorrectly - An inadvertent error was committed and such error was rectified, albeit irregularly, however, sum recovered from petitioner's bank account - Order set aside and matter remanded: HCKarnataka IT Industries piling pressure on govt to extend working hoursGST - Since notification is declared unconstitutional, Amount of IGST paid pursuant to Entry No. 10 of Notification No. 10 of 2017 is to be refunded along with statutory interest: HCStudy says earth’s water depleting fastFDI inflows slide to USD 26.5 bn in 2024 from USD 42 bn in 2023: Economic Survey
Import of goods in Completely Knocked Down (CKD) condition

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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