Customs exemption granted for imported electrical switches after tribunal overturns Commissioner's rejection of amperage evidence

CESTAT NEW DELHI allowed the appeal challenging Commissioner's order denying exemption notification 50/2017-Cus for imported Internal Remote Electrical Tilt Switches (iRET). The Commissioner rejected appellant's claim that imported iRETs were less than 5 amperes despite test reports from government laboratory and supplier's clarification letter explaining typographical error in invoices showing 5 amperes. CESTAT held Commissioner erred in rejecting evidence when product brochures, test reports, and supplier clarification consistently confirmed actual amperage was 1.3 amperes. Tribunal ruled duty must be charged on goods actually imported, not on documentary declarations containing typographical errors. Order set aside with consequential relief granted.

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Issues involved:
The issues involved in the judgment are the incorrect application of exemption notification leading to a demand under section 28(1) of the Customs Act, 1962, and the imposition of a penalty under section 112(b) (ii) of the Act.

Issue 1: Incorrect application of exemption notification:
The appellant, M/s. Huber + Sunher Electronics Pvt. Ltd., imported iRETs of two models and self-assessed duty based on Exemption notification no. 50/2017-Cus dated 30.6.2017. However, discrepancies were found in the declaration of amperage in the documents and the exemption criteria. The Principal Commissioner confirmed a demand of Rs. 96,74,804 and imposed a penalty of Rs. 9,0,000 under the relevant sections of the Customs Act, 1962.

Details for Issue 1:
During the period in question, the appellant imported iRETs of two models, Runshine RS-IRCU50D-1 and Runshine RS-IRCU50D-2, claiming exemption under notification 50/2017-Cus. However, post-clearance audit revealed that the declared amperage of '5 amperes' did not align with the exemption criteria for switches of less than 5 amperes as per the notification.

A consultative letter and a subsequent Show Cause Notice were issued to address the discrepancy, leading to the impugned order by the Principal Commissioner confirming the duty demand and penalty imposition. The appellant contended that the iRETs were actually less than 5 amperes, citing errors in the documentation by the supplier and inadvertent mistakes in the Bills of Entry.

Issue 2: Discrepancy in amperage declaration:
The main question revolved around whether the imported iRETs were of 5 Amps as declared in the Bills of Entry or less than 5 Amps as asserted by the appellant based on supporting documents and evidence presented during the proceedings.

Details for Issue 2:
The appellant provided various documents to support their claim, including test reports, product brochures, a letter from the supplier, an affidavit, and customer requirement documents. The appellant argued that despite the amperage error in the initial documentation, subsequent imports rectified this mistake, accurately reflecting the amperage of the iRETs.

The Revenue's representative contended that the amperage declaration in the Bills of Entry should prevail, disregarding the supporting evidence provided by the appellant. The dispute centered on the interpretation of the exemption notification criteria and the factual amperage of the imported goods.

Conclusion:
The Appellate Tribunal, after considering the evidence presented, found in favor of the appellant. The Tribunal emphasized that duty should be charged based on the actual imported goods, not on discrepancies in documentation. Consequently, the impugned order was set aside, providing relief to M/s. Huber + Sunher Electronics Pvt. Ltd.

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