Pranav B Prem

The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), New Delhi Bench, comprising Justice Dilip Gupta (President) and Mr. P.V. Subba Rao (Technical Member), has held that digital still image video cameras imported by Sony India Pvt. Ltd. are eligible for basic customs duty (BCD) exemption under Notification No. 25/2005-Cus dated 01.03.2005, as amended by Notification No. 15/2012-Cus dated 17.03.2012. The Tribunal set aside the earlier order passed by the Commissioner (Appeals) and allowed Sony’s appeal, granting it the benefit of the exemption with consequential relief.

Background

The appeal arose out of an order dated 20.03.2018 passed by the Commissioner of Customs (Appeals), New Delhi, which had dismissed the appeal filed by Sony India Pvt. Ltd. and upheld the denial of BCD exemption by the Deputy Commissioner of Customs.

Also Read: Karbonn, Service Centre, and Retailer Held Liable by Lucknow Consumer Commission for Failing to Repair Defective Mobile Phone

The denial of exemption was based on an earlier 2017 decision of a Division Bench of the Tribunal in Sony's own case, wherein it had been held that digital still image video cameras were not eligible for BCD exemption under Notification No. 25/2005-Cus, as amended by Notification No. 15/2012-Cus.

Sony filed an appeal against the said decision before the Supreme Court, and the Apex Court, vide its order dated 07.11.2024, remanded the matter back to the Tribunal with the direction to confine the scope of adjudication to the normal limitation period under Section 28(1) of the Customs Act, as the extended limitation under Section 28(4) had already been held inapplicable.

In the meantime, the issue concerning the correct interpretation of the Explanation added to Notification No. 25/2005-Cus through Notification No. 15/2012-Cus was referred to a Larger Bench of the Tribunal.

Reference to Larger Bench & Subsequent Precedent

The Larger Bench of CESTAT, in its decision dated 14.06.2024, held that: “Digital still image video cameras are eligible for basic customs duty exemption under Notification No. 25/2005-Cus. as amended. The earlier interpretation adopted in the 2017 decision of the Division Bench in Sony India’s case is not sustainable.”

This Larger Bench view was followed by another Division Bench of the Tribunal in the case of Nikon India Pvt. Ltd. v. Commissioner of Customs (Import), New Delhi, in final order dated 09.09.2024, which allowed the exemption claim on digital still image video cameras identical to the ones imported by Sony.

Observations of the Tribunal

The Tribunal in the present case recorded that:

• The goods imported by Sony India in the present appeal are identical to those involved in the Nikon case.

• Both counsel for Sony and the department's representative confirmed this factual similarity on record.

• The Larger Bench decision dated 14.06.2024, being authoritative, overruled the earlier 2017 ruling that was the basis of the denial of exemption.

Accordingly, the Tribunal held: “The issue stands covered in favour of the appellant by the Larger Bench decision. Hence, the digital still image video cameras imported by the appellant are eligible for exemption from payment of basic customs duty under Notification No. 25/2005-Cus. dated 01.03.2005 as amended by Notification No. 15/2012-Cus. dated 17.03.2012.” It further noted that the Supreme Court had remanded the matter only on the limited issue of normal limitation under Section 28(1), and the scope of the present adjudication did not include extended limitation.

Also Read: Extended Period Of Limitation Can’t Be Invoked In Absence Of Suppression Of Fact With Tax Evasion Intention, Rules CESTAT

Final Order

Based on the above findings, the CESTAT held: “The order dated 20.03.2018 passed by the Commissioner (Appeals) is set aside. The appeal filed by Sony India Pvt. Ltd. is allowed with consequential relief.”

Appearance

Shri B L Narasimhan, Shri Ashwani Bhatia and Ms. Anjali Gupta, Advocates for the Appellant

Shri Ajay Jain, Special Counsel of the Department

Cause Title: M/s Sony India Pvt. Ltd. V. Commissioner of Customs Appeal

Case No: Customs Appeal No.  51699 Of 2018

Coram: Hon’ble Mr. Justice Dilip Gupta [President], Hon’ble Mr. P.V. Subba Rao [Member (Technical)]

[Read/Download order]