Imported party decoration balloons wrongly confiscated under BIS toy registration requirements, exclusion for ornamental decorations applies

CESTAT Chennai held that imported balloons for party decorations were wrongly confiscated under BIS registration requirements. The appellant consistently maintained goods were for decoration, not toys for children under 14 years. The Toys Quality Control Order 2020 excludes holiday decorations primarily intended for ornamental purposes. Department failed to conduct material tests despite appellant's offer and couldn't establish goods were toys requiring BIS certification. The confiscation order was set aside, goods ordered released upon payment of applicable duty, and redemption fine waived. Appeal allowed with consequential reliefs.

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Issues Involved:
1. Classification of imported balloons.
2. Requirement of BIS certification for imported balloons.
3. Confiscation and penalty imposed by the Original Authority.
4. Applicability of the Toys (Quality Control) Order, 2020.

Summary:

1. Classification of Imported Balloons:
The appellant classified the imported balloons under CTH 9503 based on the Analytics Report 46/2021-22 issued by the National Customs Targeting Centre, Mumbai, which stated that balloons are classifiable under CTH 9503. The department did not distinguish between toy balloons and decoration balloons, leading to the classification issue.

2. Requirement of BIS Certification:
The department argued that the balloons required compulsory registration under the Bureau of Indian Standards (BIS) as per the Toys (Quality Control) Order, 2020, which mandates that toys designed or intended for use by children under 14 years must conform to IS 9873 standards. The appellant contended that the balloons were intended for party decoration and not for use by children, thus exempt from BIS certification.

3. Confiscation and Penalty Imposed by the Original Authority:
The Original Authority ordered the confiscation of the goods under Section 111(d) of the Customs Act, 1962, with an option to re-export the goods on payment of a redemption fine of Rs. 30,000/-. A penalty of Rs. 25,000/- was also imposed under Section 112(a) of the Customs Act, 1962. The Commissioner (Appeals) upheld this order.

4. Applicability of the Toys (Quality Control) Order, 2020:
The appellant relied on the clarification from the Department for Promotion of Industry and Internal Trade (DPIIT), which stated that holiday decorations intended for ornamental purposes are excluded from the scope of the TQC Order. The High Court of Calcutta in Commissioner of Customs Port vs. Ess Enn Impex and another, and the Authority for Advance Rulings Customs, Mumbai, in In Re: Bharat Balloon House, supported this view, stating that such balloons are not toys and thus do not require BIS certification.

Judgment:
The Tribunal held that the imported balloons were intended for decoration purposes and not as toys for children, thus exempt from BIS certification. The confiscation order and the penalty imposed by the Original Authority were set aside. The goods were ordered to be released to the appellant on payment of applicable duty, if any, and the redemption fine was also set aside. The appeal was allowed with consequential reliefs.

Conclusion:
The Tribunal concluded that the imported balloons used for party decorations are not liable for confiscation under the Toys (Quality Control) Order, 2020, and do not require BIS certification. The appeal was allowed, setting aside the confiscation and penalty orders.

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