Goods imported by Sony cannot be treated as complete CTV Sets: SC

The Supreme Court vide Judgment dated 23rd September 2008 AIT-2008-340-SC has dismissed the appeal filed by Commissioner of Customs, New Delhi against Sony India Ltd. By the order of the Commissioner, the import of several parts of Colour Television made by Sony for the period from April 1995 to 1997 were treated as import of complete CTV Sets for the purpose of assessment by the Commissioner. The issue before the Apex was as under: Whether the goods in question are components and cannot be treated as complete colour Television sets and hence the duty demand, confiscation of penalty are unsustainable as held by Ld. Member (J.)? OR Whether the issue as to the circumstances under which Rule 2 (a) of the Interpretative Rules can be applied, as to whether the benefit of Notification exempting components only will be available, if the product is considered as complete or finished article by virtue of deemed provision of Rule 2(a), and whether the change effected in Explanatory Notes of HSN will give only prospective application or it will be applicable for the earlier period also, requires to be referred to a Larger Bench, as held by Ld. Member (T.)?” SC held that in this case the goods brought were not having the essential character of CTVs. We do not find anything to take a view that the goods were in unassembled or dis-assembled condition and they should be taken to be the complete CTVs, particularly when there is no finding recorded anywhere on facts that all these goods could make 1500 CTVs. However, we accept the argument that the goods brought in different consignments separately on the basis of valid import licences would not attract the import duty as if they were the finished goods. Rule 2(a) would not be applicable to the present case since there is no question of the goods having the essential character of CTVs. In that view, the question of applicability of Section 2(a) on this account need not be gone into in this judgment. The larger Bench of CESTAT held that components imported by Sony could not be treated as complete CTV Sets. The larger Bench also held that the duty demand, direction for confiscation and imposition of penalty were unsustainable in law. Accordingly, the order-in-original passed by the Commissioner was set aside, allowing the appeal. The order of the larger Bench of the Tribunal, was in challenge before Supreme Court.

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