TaxTMI 
TaxTMI 
2026 (6) TMI 323
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.... of networking product) through air cargo complex, New Delhi and filed four Bills of Entry in which it classified them under Customs Tariff Item [CTI] 8517 79 10 and claimed the benefit of exemption Notification No. 24/2005-Cus dated 1.3.2005 (S. No. 13S). All four Bills of Entry were cleared on self-assessment. 4. Later, on scrutiny of these Bills, it was felt that the appellant had wrongly availed the benefit of the exemption notification for the reason that the imported goods were among the PCBAs which were excluded from entry no. 13S being 'combination of one or more Packet Optical Transport Product or Switch (POTP or POTS)' and were however, covered by entry no. 22 of the same notification which attracted 10% duty. 5. Accordingly, the SCN was issued demanding recovery of differential duty with interest and penalty. 6. The appellant contested the demand asserting that the imported goods were not POTP or POTS and hence, they were not excluded by S. No. 13S of the notification. The Commissioner agreed with this submission but found that the appellant had not fulfilled the condition to avail the benefit of the exemption notification (S.No. 13S) and for that reason, denied....
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....lows: S. No. Heading, subheading or tariff item Description 13S 8517 79 10 All goods other than Printed Circuit Board Assembly (PCBA) of the following goods, namely- (a) cellular mobile phonses (b) Base station (c) Optical transport equipment (d) Combination of one or more of Packet Optical Transport Product or Switch (POTP of POTS) (e) Optical Transport Network (OTN) products (f) IP Radios (g) Soft switches and Voice over Internet Protocol (VoIP) equipment, namely, VoIP phones, media gateways, gateway controllers and session border controllers; (h) Carrier Ethernet Switch, Packet Transport Note (PTN) products, Multiprotocol Label Switching- Transport Profile (MLPS-TP) products; (i) Multiple Input/Multiple Output (MIMO) products; (j) Long Term Evolution (LTE) products (k) Wrist wearable devices (commonly known as smart watches) Subject to the condition that the importer follows the procedure set out in the Customs (Imports of Goods at Concessional Rate of Duty) Rules 2017 and at the time of importation of the above goods furnishes an undertaking to the Deputy Comm....
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....notification. Although no submissions were made on this issue, we find it is necessary to examine it. 18. The condition in the exemption notification (S. No. 13S) is the importer follows the procedure set out in the Customs (Imports of Goods at Concessional Rate of Duty) Rules, 2017 [IGCR Rules] at the time of importation of the goods furnishes an undertaking to the Deputy Commissioner or the Assistant Commissioner of the Customs, as the case may be to the effect that,- (A) imported goods shall not be used in the manufacture of goods mentioned at (b) to (i) above; (B) in the event of failure to comply with (A) above, he shall be liable to pay an amount equal to the difference between the duty leviable on the imported goods but for the exemption under this notification and that already paid at the time of importation.' 19. The goods mentioned at (b) to (i) of the entry are those goods which were excluded from S. No. 13S of the notification. Hence, no exemption is available to those goods. Other goods are exempted, subject to the condition that they are not used to manufacture these excluded goods [S.No. (b) to (i)]. In order to ensure that they are not used t....
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.... and that already paid, if any, at the time of importation, along with interest, at the rate fixed by notification issued under section 28AA of the Act, for the period starting from the date of importation of the goods on which the exemption was availed and ending with the date of actual payment of the entire amount of the difference of duty that he is liable to pay. (3) The Deputy Commissioner of Customs or, as the case may be, Assistant Commissioner of Customs having jurisdiction over the premises where the imported goods shall be put to use for manufacture of goods or for rendering output service, shall forward one copy of information received from the importer to the Deputy Commissioner of Customs, or as the case may be, Assistant Commissioner of Customs at the Custom Station of importation. (4) On receipt of the copy of the information under clause (b) of sub-rule (1), the Deputy Commissioner of Customs or, as the case may be, Assistant Commissioner of Customs at the Custom Station of importation shall allow the benefit of the exemption notification to the importer who intends to avail the benefit of exemption notification. 6. Importer who intends to....
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....g with interest, at the rate fixed by notification issued under section 28AA of the Act, for the period starting from the date of importation of the goods on which the exemption was availed and ending with the date of actual payment of the entire amount of the difference of duty that he is liable to pay. 22. The above scheme, in a nutshell, is that the importer gives a bond and undertaking to his jurisdictional Assistant or Deputy Commissioner of Central Excise to use the goods in the manner specified based on which the Assistant or Deputy Commissioner of Customs at the port would clear the goods. Thereafter, if the importer fails to use the goods in the manner indicated, the jurisdictional Assistant Commissioner or Deputy Commissioner would recover the amount enforcing the bond. These Rules are intended to ensure that an exemption given to the imported goods for use in a particular manner are used so and not otherwise. 23. The exemption Notification No. 24/2005-Cus [S. No. 13S] is a bit unusual as the exemption is available not on the condition that they will be used in a particular fashion but on the condition that they will not be used in a particular fashion viz., in the ....