1992 (2) TMI 229 - AT - Customs

Tribunal reclassifies imported batteries, sets aside penalty due to insufficient evidence.

The tribunal allowed the appeal, classifying the imported batteries as dry cell batteries under Serial No. 686 of Appendix 6, List 8, Part-1 of the Import ... Import policy Issues Involved:1. Classification of imported batteries under the appropriate Customs Tariff Heading.2. Eligibility for Open General Licence (OGL) benefit under the Import Policy, 1988-91.3. Imposition of penalty under Section 112 of the Customs Act, 1962.Detailed Analysis:1. Classification of Imported Batteries:The appellant declared the imported goods as electronic rechargeable batteries other than lead acid batteries, seeking assessment under Customs Tariff Heading 8507.20. The dispute arose when the Deputy Chief Chemist's test revealed that the batteries were based on lead electrodes/plates embedded in a gelled electrolyte consisting of sulphuric acid. The adjudicating authority concluded that the batteries were lead acid storage batteries, thus falling under Serial No. 561 of Appendix 3, Part-A of the Import Policy, 1988-91. The appellant contended that the batteries were dry cell batteries, which should be classified under Serial No. 686 of Appendix 6, List 8, Part-1.2. Eligibility for OGL Benefit:The appellant claimed that the batteries were entitled to OGL benefit under Appendix 6, List 8, Part-1, Serial No. 686 of the Import Policy, 1988-91. The adjudicating authority, relying on the test report and the definition of lead acid batteries, determined that the batteries were lead acid storage batteries, which are restricted under Serial No. 561 of Appendix 3, Part-A. The appellant argued that the test report did not conclusively establish that the batteries were lead acid storage batteries and pointed to the lack of a clear definition of 'dry cell battery' in the policy. The tribunal noted that in the absence of a specific definition, terms should be understood in their common trade parlance, and concluded that the batteries, filled with gelled sulphuric acid, should be treated as dry cell batteries.3. Imposition of Penalty:The adjudicating authority imposed a penalty of Rs. 1,50,000/- under Section 112 of the Customs Act, 1962, based on the classification of the batteries as lead acid storage batteries. The appellant contended that the penalty was excessive and argued that the test report was incomplete and unreliable. The tribunal found that there was no conclusive evidence to classify the batteries as lead acid storage batteries and extended the benefit of doubt to the appellant. Consequently, the tribunal set aside the penalty.Conclusion:The tribunal allowed the appeal, concluding that the imported batteries should be classified as dry cell batteries under Serial No. 686 of Appendix 6, List 8, Part-1 of the Import Policy, 1988-91. The penalty of Rs. 1,50,000/- imposed on the appellant was set aside due to the lack of conclusive evidence classifying the batteries as lead acid storage batteries.