While granting relief to Lenovo, the Mumbai Bench of the Customs, Excise & Service Tax Appellate Tribunal (CESTAT) allowed the benefit of exemption from additional duties of customs to hard disk drives.
M/s Lenovo India Pvt Ltd, the petitioner challenged the intent of customs authorities to deny them the benefit of exemption from additional duties of customs beyond 6%, accorded to ‘hard disk drives’ in notification no. 6/2006-CE dated 1st March 2006 and notification no. 12/2012-CE dated 18th March 2012, by the adoption of tariff item 8471 7030 of First Schedule to Customs Tariff Act, 1975 on import of ‘external/portable hard disk drive’ of several makes and models.
The Principal Commissioner of Customs, Air Cargo Complex (Import), Mumbai confirmed the differential duty of ₹14,02,637 on imports effected through Air Cargo Complex (ACC), Mumbai, Air Cargo Complex (ACC), Delhi, Air Cargo Complex (ACC), Chennai and Inland Container Depot (ICD), Whitefield, Bangalore during the period of the dispute.
It was contended by the petitioner that the eligibility for the said exemption has been decided by the Tribunal in several disputes. It was argued that the nature of the product involved in those disputes is ‘external hard disk drives’ and the said orders have held that these are the same as ‘hard disk drives’ which, indisputably, is entitled to the benefit of the exemption notification.
It was viewed that the First Schedule to Customs Tariff Act, 1975 encompassing all products within the tariff enumeration does not offer scope for traversing beyond the ninety-eight chapters making it evident that certainty of fitment is one of the characteristics of classification for the smooth operation of international trade. Settled classification may be unsettled only by the argument of inapplicability owing to the distinguishable nature of the product which was not put forward by the Authorized Representative.
In the light of the categorical finding, judicial propriety requires non-discriminatory application of classification so held and notwithstanding the continuing cavil of Revenue about the eligibility for concessional duty.
Mr C J Mathew, member (technical) and Mr Ajay Sharma, member (judicial) comprising CESTAT bench has observed that “it is the foregoing of revenue and not the principle espoused in the said exemption notification that engenders the contrarian approach on the part of the tax collector and that is not an acceptable argument to unsettle settled law.”
While allowing the appeal, the CESTAT set aside the impugned order. Ms Tridipa Banarjee, Advocate appeared for the appellants and Shri Maonoj Das, Assistant Commissioner appeared for the respondent.
Subscribe Taxscan Premium to view the JudgmentSupport our journalism by subscribing to TaxscanPremium. Follow us on Telegram for quick updates.
