Trade parlance classification of imported batteries meant the importer got the benefit of doubt and penalty fell away.

In the absence of a statutory definition, imported goods must be classified under the relevant import policy entry according to trade parlance and popular sense. Where the evidence does not conclusively establish that the goods fall within a restricted classification, the benefit of doubt goes to the importer. Applying that approach, batteries with the outward appearance of dry cells were not conclusively shown to be lead acid storage batteries, so they were treated as dry cell batteries for policy purposes. On that basis, the penalty under Section 112 of the Customs Act, 1962 was unsustainable.

---

---

Issues: Whether the imported batteries were classifiable as dry cell batteries eligible under Serial No. 686 of Appendix 6, List 8, Part-1 of the Import Policy, 1988-91 or as lead acid storage batteries falling under Serial No. 561 of Appendix 3, Part-A, and whether the penalty imposed under Section 112 of the Customs Act, 1962 was sustainable.

Analysis: The test report showed that the batteries were based on lead electrodes or plates with immobilized gelled sulphuric acid electrolyte and were not based on manganese dioxide or nickel cadmium. The order also noted that the imported goods had the outward appearance of dry cell batteries, and the classification had to be understood in trade parlance and popular sense where no statutory definition was provided. However, the report did not conclusively establish that the electrodes were made of lead or lead oxide in a manner sufficient to show that the goods were lead acid storage batteries. The catalogue produced by the appellant was not effectively displaced, and the material on record created doubt as to whether the goods squarely fell within the restricted entry. Where the classification was not conclusively established, the benefit of doubt had to go to the importer.

Conclusion: The goods were held not to be conclusively shown as lead acid storage batteries and were treated as dry cell batteries for policy purposes; the penalty under Section 112 of the Customs Act, 1962 was unsustainable.

Ratio Decidendi: In the absence of a statutory definition, classification of imported goods under an import policy entry must be determined in trade parlance, and where the material on record does not conclusively establish the restricted classification, the benefit of doubt goes to the importer.

---