Import of Spare Power Supply Not Subject to BIS Licence Requirement: CESTAT Sets Aside Customs Confiscation and Penalty [Read Order]

The Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has set aside the confiscation of the imported spare power supply units and the penalty imposed on the ground that the imported goods did not fall within the purview of the requirement of mandatory certification under the Bureau of Indian Standards licensing regime.

The Tribunal has held that the imported goods are spare power supply units, and the same are required to be replaced and maintained. Hence, the imported goods did not fall within the purview of the requirement of mandatory certification under the Bureau of Indian Standards licensing regime.

Hence, the confiscation of the imported goods and the imposition of the penalty by the customs authorities are not sustainable.

Criticalog India Private Limited imported spare power supply units which were to be used as spares for the equipment that had been previously installed. At the time of import the customs detained the goods contending that the goods were covered under the Electronics and Information Technology Goods (Requirements for Compulsory Registration) Order which mandated the BIS registration of the goods.

Further,the department contended that the importer had failed to produce a valid license from the BIS for the import of the goods and hence ordered the confiscation of the goods along with the imposition of a penalty under the customs laws.

The importer of the goods contended that the power supply units were not imported for the purpose of selling the goods but were only imported for the purpose of servicing the equipment that had been previously installed.

However,the importer contended that the goods were only spares and were not covered under the mandatory BIS registration requirement.The department contended that the importer had failed to obtain the BIS registration for the import of the electrical goods, as the electrical goods were included in the notified category.

After examining the nature of the goods and the applicable regulatory framework the Tribunal observed that spare parts imported solely for replacement purposes are treated differently from finished consumer products under the BIS regulatory regime.

The bench noted that the department had incorrectly applied the BIS certification requirement to spare components that were not intended for independent commercial sale. In view of this finding, the Tribunal concluded that the confiscation and penalty lacked legal basis.

Accordingly, the tribunal set aside the confiscation order and penalty, granting relief.

Support our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates