Clubbing of split imports under Rule 2(a) upheld where related firms used components to bypass licensing restrictions.

Contemporaneous imports by related entities were clubbed under Rule 2(a) because the evidence showed a deliberate splitting of complementary components into separate bills of entry to present complete radio cassette recorders and rechargeable lights as parts and evade licensing control; the goods were therefore treated as CKD/SKD imports. Admissions recorded under Section 108 supported suppression with intent to evade duty, so the extended limitation period, confiscation, and penalty under Section 114A were upheld, while penalty under Section 112 was excluded and Section 111(o) held inapplicable. The matter was remanded only for duty quantification, penalty determination under Section 114A, and consideration of redemption fine.

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Issues: (i) Whether the components imported under different Bills of Entry by closely connected importers could be clubbed under Rule 2(a) so as to treat the imports as complete radio cassette recorders and rechargeable lights in CKD/SKD condition, in breach of the Import Policy. (ii) Whether the extended period of limitation, confiscation, and penalty provisions were invocable on the facts admitted in the statements recorded under Section 108.

Issue (i): Whether the components imported under different Bills of Entry by closely connected importers could be clubbed under Rule 2(a) so as to treat the imports as complete radio cassette recorders and rechargeable lights in CKD/SKD condition, in breach of the Import Policy.

Analysis: The imports were made over a period of time by two proprietorships controlled by husband and wife having common economic interests. The evidence showed matching imports of complementary components on the same or nearby dates, and in some cases in the same container, so that the components together constituted complete consumer goods. Rule 2(a) permits unassembled or disassembled complete articles to be treated as the complete article when presented as such. The factual matrix was treated as analogous to the earlier decision where clubbing of parts was upheld because the imports were in substance a complete article split into components to bypass licensing restrictions.

Conclusion: The clubbing of the imports was justified and the goods were correctly treated as radio cassette recorders and rechargeable lights in CKD/SKD condition, against the assessee.

Issue (ii): Whether the extended period of limitation, confiscation, and penalty provisions were invocable on the facts admitted in the statements recorded under Section 108.

Analysis: The statements recorded from the importer were treated as confessional and were relied upon as establishing the deliberate device of importing restricted consumer goods as components through two firms to evade licensing restrictions and duty. On that basis, suppression with intent to evade duty was found, making the extended period available. The misdeclared goods were also held liable to confiscation under the relevant confiscation clauses, and penalty under Section 114A was held attracted. Penalty under Section 112 was excluded by the statutory bar noted by the Tribunal, and Section 111(o) was held inapplicable.

Conclusion: The extended period of limitation and liability to confiscation and penalty under Section 114A were upheld, while penalty under Section 112 was ruled out, partly in favour of Revenue.

Final Conclusion: The impugned order was set aside and the matter was remanded to the Commissioner only for quantification of duty, determination of penalty under Section 114A, and consideration of redemption fine in accordance with law.

Ratio Decidendi: Where contemporaneous imports by related persons or entities, viewed in substance and supported by admissions, show a deliberate splitting of a restricted complete article into components to evade licensing control and duty, the imports may be clubbed and treated as the complete article for customs assessment and consequential action.

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