Separate consignments cannot be deemed a complete system under Rule 2(a); component-based exemption remains available.

Imports made in separate consignments over about 22 months under 37 Bills of Entry could not be treated as complete EPABX or telephone systems in CKD/SKD condition under Rule 2(a) of the Customs Tariff interpretation rules, because they were not presented as one unassembled or disassembled whole and were classifiable as components under their own headings. On that basis, Notification No. 61/95-Cus. remained available to the imported components, and the notification could not be denied by applying a deeming fiction inconsistent with the actual nature of the goods. The demand, confiscation-related findings and penalties based on complete-system classification were therefore unsustainable.

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Issues: (i) Whether the imported goods, brought in different consignments over a period, could be treated as complete EPABX and telephone systems in CKD/SKD condition and classified under Rule 2(a) of the Rules for the Interpretation of the Customs Tariff. (ii) Whether the exemption under Notification No. 61/95-Cus. was available to the imported goods.

Issue (i): Whether the imported goods, brought in different consignments over a period, could be treated as complete EPABX and telephone systems in CKD/SKD condition and classified under Rule 2(a) of the Rules for the Interpretation of the Customs Tariff.

Analysis: Rule 2(a) applies to complete or finished articles presented unassembled or disassembled, or to incomplete or unfinished articles having the essential character of the complete or finished article. The imports here were made over about 22 months under 37 Bills of Entry and were not presented as one unassembled or disassembled whole. The record did not show that the complete system was brought in by splitting a single consignment for clearance through different customs stations. The imported items were classifiable as components under their specific headings and could not be recharacterised as complete goods merely because they were later assembled in the factory.

Conclusion: Rule 2(a) was not attracted, and the goods could not be treated as complete EPABX or telephone systems imported in CKD/SKD condition.

Issue (ii): Whether the exemption under Notification No. 61/95-Cus. was available to the imported goods.

Analysis: The exemption notification was to be read in the context of the goods actually imported. Since the goods were held to be components and parts, the notification applicable to such components could not be denied on the basis of deeming treatment under the interpretative rule. The earlier view extending notification benefit to components and parts was followed to maintain a harmonious reading between the notification and the classification rules.

Conclusion: The exemption under Notification No. 61/95-Cus. was available to the imported goods.

Final Conclusion: The demand, confiscation-related findings, and penalties based on treating the imports as complete systems were unsustainable, and the assessee succeeded in all the appeals.

Ratio Decidendi: Goods imported in separate consignments over time cannot be treated as complete unassembled or disassembled articles under Rule 2(a) unless the evidence shows import of the complete article as such, and an exemption notification applicable to components and parts cannot be denied by artificially invoking that deeming rule.

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