Legal principle

Goods whose tariff entry prescribes a 'Free' rate of duty are not 'dutiable goods' under Section 2(14) of the Customs Act and therefore cannot be classified under CTH 9804 ('all dutiable goods imported for personal use') merely because they are imported for personal use.

Court decision

The Tribunal allowed the appeal, holding that the keyboard is rightly classifiable under CTH 8471, where it has a specific entry at a 'Free' rate and is freely importable, and that, not being dutiable goods, it cannot be classified under CTH 9804 merely because it was imported for personal use; the 28% IGST under Sl. No. 227 of Schedule IV of Notification No. 1/2017-IGST was equally unsustainable since that entry too covers only dutiable articles. Appeal allowed with consequential relief, following the principles in Associated Cement.

Facts

The appellant, Veeresh Kumar PM, imported keyboards for automatic data processing units through courier for personal use. The department classified the keyboards under CTH 9804 9000 ('All dutiable goods imported for personal use') instead of CTSH 8471 6040 (Keyboard – duty 'Free'), assessing them to 10% BCD and IGST at 28% under Sl. No. 227 of Schedule IV of IGST Notification No. 1/2017 dated 28.06.2017. The Commissioner of Customs (Appeals), Bangalore, upheld this classification in Order-in-Appeal No. 061/2024 dated 14.03.2024, and the appellant appealed to the CESTAT Bangalore.

Key provisions

• Section 12, Customs Act, 1962 — Dutiable goods
• Section 2(22), Customs Act, 1962 — Definitions
• Section 5(1), Customs Tariff Act, 1975 — Levy of a lower rate of duty under a trade agreement
• Section 157, Customs Act, 1962 — General power to make regulations
• Section 3(7), Customs Tariff Act, 1975 — Levy of additional duty equal to excise duty, sales tax, local taxes and other charges
• Section 5(1), The Integrated Goods and Services Tax Act, 2017 — Levy and collection.
• Section 78, Customs Act, 1962 — Determination of rate of duty and tariff valuation in respect of baggage