Classification of back cover, front cover and middle covers of cellular phones cannot be under HSN 3920 as indicated by Revenue Authorities

Editor:

The Division Bench of the CESTAT New Delhi in M/s Samsung India Electronics Pvt Ltd Vs Principal Commissioner of Customs Air Cargo Complex (Import) New Delhi (Final Order 51665/2023 Dated 20.12.2023) has confirmed that the back cover, front cover and middle cover for cellular phones/mobile phones can be classified under HSN 85177090 and that these do not fall under HSN 39209999. The following points were made by the Bench –

  1. Classification of the goods is a part of assessment and the importer, the proper officer and appellate authorities alone are competent to decide it.
  2. The policy of the MeiTY, which is in the nature of an executive policy decision of that Ministry cannot determine the classification of goods under the Customs Act firstly because the authority making the policy is not empowered under Section 17 and secondly because the policy is not a quasi-judicial, appealable decision but is a policy decision while classification of goods is a part of assessment and is a quasi judicial and appealable function.
  3. The exemption notification issued by the Government under Section 25 exempts goods and does not determine the If the description of the goods and also the CTH match with the notification, its benefit is available and not otherwise. Therefore, an exemption notification cannot determine the classification but it must be applied after classifying the goods.
  4. The importer assessee has no obligation under the law to anticipate under which heading the proper officer may classify the goods and match self-assessment with it.
  5. Classification of the goods in the Bill of Entry by the importer is essentially a part of the self-assessment under Section 17 which, even if found incorrect, does not attract confiscation of the goods under Section 111(m) or the consequential penalty under Section 112.

The appeal was allowed and the impugned order of lower Authority was set aside with consequential benefit to the appellant.