Classification under Heading 9804 requires dutiable importation for importer's personal use; commercial SEZ to DTA supplies excluded.

Whether SEZ-to-DTA supplies qualify under Heading 9804 turns on three conjunctive requirements: goods must be dutiable, imported, and for the importer's personal use. IGST or other indirect levies do not convert goods into Customs 'dutiable goods'; goods subject to free rate or exemption are not dutiable. 'Personal use' must attach to the importer, not subsequent commercial customers. The SEZ-to-DTA import fiction cannot create a Customs levy where none exists, and Rule 47(5) does not independently authorize Customs interest, penalty or confiscation. Result: Heading 9804 does not apply; the demand and orders are set aside and appeal allowed for the assessee.

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Issues: (i) Whether goods cleared from SEZ to DTA to end customers are classifiable under Heading 9804 90 00 as "dutiable articles intended for personal use" or under their specific tariff headings (CTH 8471 30 10, 8471 50 00, 8528 52 00)?

Analysis: Heading 9804 applies only where three conjunctive ingredients are satisfied: the goods are "dutiable goods", they are "imported", and the importation is for "personal use." "Dutiable goods" is defined as goods chargeable to duty under the Customs Act and on which duty has not been paid. IGST and other levies under the IGST Act are distinct from Customs duty levied under Section 12 of the Customs Act; levy of IGST therefore does not, by itself, render goods "dutiable goods" under the Customs Act. The tariff schedule shows that the contested specific headings prescribe either a free rate or an exemption (Notification No. 24/2005-Cus) for the items in question; goods on which no Customs duty is leviable are not "dutiable goods." The characterization of importation as "for personal use" must relate to use by the importer and not to subsequent purchasers; goods manufactured and sold in the ordinary course of business to customers are not imports for the personal use of the importer. The legal fiction treating SEZ-DTA removals as comparable to imports cannot be extended to create a Customs levy where none exists under the Customs Act and cannot displace the identity and specific classification of goods under the tariff headings. Chapter and section notes, subheading descriptions, and the General Rules for Interpretation require classification by specific headings when applicable; the Revenue bears the burden to demonstrate that the declared classification is incorrect and justify the alternative classification under Heading 9804. Rule 47(5) of the SEZ Rules and the SEZ Act do not provide an independent mechanism to levy Customs interest, penalty or confiscation contrary to the authorization under the Customs Act.

Conclusion: The goods are not "dutiable goods" within the meaning of Section 2(14) of the Customs Act, 1962 and are not imported for the personal use of the importer; therefore Heading 9804 90 00 does not apply. The impugned classification, demand, and consequential orders are set aside and the appeal is allowed in favour of the assessee.

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