TaxTMI 
TaxTMI 
2025 (12) TMI 569
X X X X Extracts X X X X
X X X X Extracts X X X X
....eals) New Customs House, New Delhi wherein he upheld the order dated 03.09.2020 passed by the Additional Commissioner and dismissed the appellant's appeal except to the extent of setting aside the penalty under section 117 imposed on the appellant. He upheld the demand of duty under section 28 (1) of the Customs Act 1962 [The Act] along with interest only. 2. We have heard learned counsel for the appellant and learned authorized representative appearing for the Revenue and perused the records. 3. The short question to be answered is whether the "One Time Seal with RFID" imported by the appellant is correctly classifiable under Customs Tariff Item [CTI] 8523 59 10 as classified by the appellant in the Bills of Entry or under CTI 8309 9....
X X X X Extracts X X X X
X X X X Extracts X X X X
....eals with RFID tags. According to the Revenue these are essentially one time seals with additional functionality of having RFID tags and hence are classifiable as seals under CTI 8309 90 30. According to the appellant, these are classifiable as proximity tags, cards and tags under the CTI 8523 59 10. 6. The CBIC had issued a Instruction no. 16/2018 dated 08.10.2018 stating that they deserved to be classified as RFID tags under 8309 90 30. The consignments were imported by the appellant between December, 2017 and September, 2018 before the issue of this Instruction. Three show cause notices dated 26.12.2019, 26.12.2019 and 24.02.2020 were issued to the appellant after the CBEC issued Instruction no. 16/2018. However, the reasons for re-cl....
X X X X Extracts X X X X
X X X X Extracts X X X X
....d also taken this ground before the Commissioner (Appeals) and his findings on this issue are as follows: "5.6. The next objection is about non applicability of Instruction No. 16/2018-Cus on past import. In this connection, I note that the Adjudicating Authority has decided the issue of classification on merits & not solely on the basis on Instruction No. 16/2018-Cus. Accordingly, the issue of retrospective or prospective application of Instruction No. 16/2018-Cus is inconsequential." 9. Learned authorized representative appearing for the department also vehemently argued that both the impugned order and the Order in Original were not merely based on the CBEC's Instruction but were also based on merits. 10. We have considere....
X X X X Extracts X X X X
X X X X Extracts X X X X
....a 85 23 51 00 -- Solid-state non-volatile storage devices 8523 52 -- Smart Cards 8523 59 -- Other 8523 50 10 - Proximity cards and tags 12. The submission of he learned counsel for the appellant is that the RFID tags cost a lot more (Rs. 60-90 per piece) than the traditional seals (Rs. 10-20 per piece) and they also provide the additional functionality of being able to check for identification of the container details shipping details and tamper status. According to him the RFID is the essential character of the good and, therefore, they should be classified under 8523 59 10 as RFID tags as per the General Rule of Interpretation Rule 3(b). It is his further submission that even if it can be argued that....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ngly the demand of duty needs to be set aside. On the other hand, learned authorized representative for the Revenue submits that the invoice and bill of lading of the appellant describe the goods as "bolt seals" which is the essential character of the goods. For this reason, he submits that the goods are correctly classifiable under CTI 8309 90 30. 14. We have considered the submissions advanced by both sides on merits of classification. In order to determine the essential character of a good, it must be seen as to what it is intended to be and how it is sold and bought in the market. 15. A mobile phone, for instance, may have many excellent features such as that of calculator, diary for keeping notes, a minicomputer, a video player a....