Classification of imported audio goods and MRP abatement turns on proof that they were MP3 players, not assumption

Imported goods declared as other than MP3 players were assessed and cleared on that basis, and the higher basic customs duty paid was consistent with that declaration. The later differential duty demand, raised on the assumption that the goods were MP3 players, failed because there was no post-clearance examination or other material supporting that assumption. On the notification scheme, goods other than MP3 players or MPEG 4 players were eligible for 35% abatement from MRP, while MP3 players attracted only 30%. As the goods were not shown to be MP3 players, the differential duty demand was held unsustainable.

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Issues: Whether the imported goods were MP3 players so as to allow only 30% abatement from MRP for levy of CVD, or whether they were goods other than MP3 players entitled to 35% abatement, and whether the resulting differential duty demand was sustainable.

Analysis: The appellant had classified the goods in the bill of entry as other than MP3 players and paid BCD accordingly. The goods were assessed and cleared on that declaration. The demand was raised later on the assumption that the goods were MP3 players, but there was no examination of the goods after clearance and no material to support that assumption. The recorded description and the higher BCD paid were inconsistent with the Department's later stand that the goods were MP3 players. Serial No. 90 of Notification No. 49/2008-CE(NT) dated 24.12.2008 provided 35% abatement for goods other than MP3 players or MPEG 4 players.

Conclusion: The goods were not shown to be MP3 players, the demand of differential duty was not sustainable, and the appeal was allowed in favour of the assessee.

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