TaxTMI 
TaxTMI 
2025 (12) TMI 1629
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....basic MIKO-1. The issue in the present Appeals revolves around the classification of 'MIKO-3' model; the admitted position is that MIKO-1 which was claimed to be a basic model, was classified under Customs Tariff Heading (CTH) 95030030. 3. Considering the advancement in Technology and Composition, MIKO-2 & MIKO-3 were classified by the Appellant under CTH 84714190 with description ADPU for learning and entertainment model MO201 and ADPU for learning and entertainment model EMK301, respectively. The model in dispute, i.e. MIKO-3 is claimed to be sold by the Assessee on its own website as well as through e-commerce platforms and it is claimed that the said model is a social Robot. During the year under dispute, it is the case of the Assessee that per Bill of Entry dated 28.04.2022, it had cleared 2876 units of MIKO-3 with classification as claimed above and thereby claiming exemption under Sl.No.8 of Notification No.24/2005-Cus. dated 01.03.2005 from payment of Basic Customs Duty (BCD); the Assessee appears to have discharged appropriate IGST on the imported goods. It appears that soon thereafter, the Assessee filed two more Bills of Entry for import of the same model claiming sim....
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.... authorities below cannot stand. He would thus pray for setting aside the demands and the impugned orders. 6. Per contra, Smt. O.M. Reena, learned Additional Commissioner defended the impugned orders, she would take us through the Order-in-Original dt.06.12.2023 & 01.11.2022 wherein the Original Authority has given reasons to hold the goods in question as 'electronic toys' and the said view has been upheld in the impugned orders. Therefore, she would submit that the demand is in order and thus the impugned orders may be upheld. 7. We have considered the rival contentions, we have perused the documents placed on record before us and we have also gone through the orders of Mumbai Bench in the Assessee's own case (supra) although for different consignment. Co-ordinate Mumbai Bench has upheld the classification declared by the Appellant-Assessee. After hearing both sides, the only question that survives for our consideration is, 'whether the classification as declared by the Assessee-Importer is correct or re-classification made by the Revenue is sustainable in law'? 8. Learned Senior counsel has taken us through the relevant observations/findings of the co-ordinate Mumbai Ben....
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....ations (apps) designed for learning, entertainment purpose. However, the SCN has not appreciated that a possible use for entertainment (and therefore, as a toy) was merely one of the applications of the product and not 'the' specific function of the product. The SCN itself has noted in Para 9 that the product was 'designed for learning' (though a half truth, as it has many other capabilities of a computer). However, The SCN has chosen to give primacy to the 'fun part' rather than the 'learning part' and considered 'the fun part' as the 'specific function'. iv. ... ... ... v. The SCN has not appreciated that a product cannot be considered as 'toys' only because the product caters to the market segment of kids. The SCN has also not appreciated that the product cannot be considered 'as a toy' only because it is sold through some shops or outlets specializing in sale of toys, rather the shops selling goods for kids. It may be appreciated that the product is offered for sale through such outlets for the convenience and ease of reaching one of the target markets of kids. It is a misconception and prejudice that the product....
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....toms Act, warranting confiscation. In this context, the Noticee referred to the decision of Supreme Court in the case of Northern Plastic Ltd. Vs. CCE reported in 1998 (101) E.L.T. 549 (S.C)" 10. In the same Order-in-Original however, the Lower Authority has felt it proper to prefer 'google search' over the explanation including the advice of Principal Advisor and the certificates by Meity and BIS. There is a reference to the brochure, which confirms that "the goods are Artificial Intelligence based Robot toy, which is programmable, voice activated, customizable with Face-ID and has motion sensors. It is designed to entertain, educate kids and young learners using Artificial Intelligence. It is designed to be a robot companion with preloaded software that is programmable. Users interact with it by voice and touch screen inputs. It responds through both voice and display screen. There are many apps available on it for videos, games, quizzes, coding challenges, experiments and other experiences. There is also a specialized app for parental control and can also be used to track progress of the kids while they use the robot for learning and activities. There are conversational learn....
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....471 All goods' being afforded exemption from Basic Customs Duty (BCD) in Notification No. 24/2005-Cus., dated 1st March, 2005 (at Serial No. 8)." Further, the Co-ordinate Bench proceeded to hold as under : "10. 'It looks like a toy and, therefore, is a toy' is a proposition which, even if superficial, may not be easily dismissed owing to simple appeal to conceptual pre-disposition. Physically, the product is not particularly big and recalls comic book portrayal of engineering fantasy. Conventionally, a toy is a plaything that acts as a prop in childish playacting without capability either for initiative or response. The impugned goods certainly does not conform to such effect notwithstanding which, and in the absence of any standard of measure of 'toy', its appeal, or lack thereof, is an uncanny resemblance to that object of childhood fantasy which may have persuaded the adjudicating authority that re-classification was warranted. It also does not meet with legislative intent as use by a particular age group does not suffice for it to be 'toy' and it is certainly not in keeping with sensitivity towards needs of children to proceed in the belief that anything th....
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....inappropriateness of Heading 8472 of First Schedule to Customs Tariff Act, 1975. The rules of engagement enunciated by the Hon'ble Supreme Court for altering classification has not been followed by the adjudicating authority. The facts, indelibly clear, does not controvert conformity with the essential requirements set out in Note 5(A) in Chapter 84 of First Schedule to Customs Tariff Act, 1975 There is no finding that the impugned goods, by incorporating or working in conjunction with 'Automatic Data Processing (ADP) machines', performs the function of 'toys' which should be the consummation of resort to Note 5(E) in Chapter 84 of First Schedule to Customs Tariff Act, 1975 and such finding is well nigh impossible in the absence of any authoritative guidance on 'toys' and its intended functions. A thought process conditioned by one's own childhood or parenting experience is not a tenable substitute. Even if this note comes into play insofar as the impugned goods are concerned, the impossibility of appending 'toys' renders the claimed classification to be the only one remaining in the ring. Consequently, the classification claimed must remain. The impugned order is set aside to allo....