COMMISSIONER OF CUSTOMS, NEW DELHI versus SONY INDIA LTD.

Citation: [2008] 13 S.C.R. 873 · Decided: 23-09-2008 · Supreme Court of India · Bench: ASHOK BHAN · Disposal: Dismissed

Judgment (excerpt)

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" 
[2008] 13 S.C R. 873 
COMMISSIONER OF CUSTOMS, NEW DELHI 
A 
v. 
SONY INDIA LTD. 
(Civil Appeal No. 8236 of 2002) 
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} 
SEPTEMBER 23, 2008 
8 
[ASHOK BHAN AND V.S. SIRPURKAR, JJ.] 
Customs Act, 1962; Ss. 111(d), 111(m), 112(a), 114(a) 
and 28ABIGeneral Rules for interpretation under First Sched-
ule of Import Tariff; r. 2(a)IExemption Notification No. 79165- c 
Gus.dated 31.3.1995: 
Evasion of customs duty by assessee - Allegedly by 
misdeclaring goods imported as component of color Televi-
,,,. 
sion (CTV) instead of declaring them as completely knocked 
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down Kits of CTV in contravention to provisions of Exim Policy D 
' 
- Held: Advanced licenses issued by Authority for import of 
components of CTV duty free in terms of exemption notifica-
tion No. 79165 - Some of the components so imported fall in 
restricted list and need to be processed further before using 
them in manufacture of CTV - CTV so manufactured partly E 
used for house consumption on payment of excise duty and 
partly exported in terms of Duty Entitlement Exemption Ger-
tificate Scheme by effecting an entry in Pass Book - R.2(a) 
would be attracted only if all the components which constitute 
--.. 
a final product would be presented at the same time for cus-
F 
tom clearance - On facts, r.2(a) not attracted - Hence, tribu-
nal rightly set aside order of appellate Commissioner con-
firming differential amount of duty, confiscation of goods and 
imposition of penalty on components of CTV imported. 
Exim Policy 1992-97 - Provisions under - Compliance G 
of. 
Words and Phrases: 
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873 
H 
I 874 
SUPREME COURT REPORTS 
(2008] 13 S.C.R. 
\,. 
.... 
A 
'as presented' - Meaning of, in the context of Rule 2(a) 
of the General Rules for interpretation under first schedule to 
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import tariff. 
Respondent-assessee, is a subsidiary of a foreign 
company manufacturing Color Television (CTV) and au-
~ 
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B dio products in India. The company obtained advanced 
Licenses from the authorities concerned for import of 
various components of CTV duty free by availing benefit 
of exemption Notification No. 79/65-Cus. dated 31.3.1995. 
c 
A Duty Entitl~ment Exemption Certificate (DEEC) Pass 
Book has also been maintained by the asssessee and in 
terms thereof it imported various components of CTV. A 
show-cause Notice was issued by the Revenue demand-
ing additional duties on the imported components treat-
ing them as complete CTV. Later, the demand of differen-
D tial amount of duty was confirmed by the authorities after 
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confiscating the goods and penalty was also imposed. 
Appeal filed thereagainst by the assessee was allowed 
by a larger Bench of the Tribunal. Hence the present ap-
peal. 
E 
Revenue contended that respondent evaded pay-
ment of duty on the CKD (completely knocked down) kits 
of CTVs by misdeclaring them as CTV components; that 
the assessee had contravened the provisions of the Exim 
F 
Policy 1992-97 by importing CKD kits of the CTVs with-
out having an import license and thereby making the 
goods liable for confiscation under Section 111(d) of the 
Act; and that though the respondent had imported the 
CKD Kits and had placed order therefor, numbering 1500 
in all, in that order, it had paid a lesser duty, showing it as 
G import of components, on which there was lesser duty, 
and as such, the respondent had breached the provisions 
of the Customs Act, 1962. 
Respondent-assessee submitted that the Tribunal 
H had correctly deduced that the components imported by 
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COMMINR. OF CUSTOMS,· NEW DELHI v. SONY 
875 
' INDIA LTD. 
. 
the respondent could not amount to the CKD Kits; that A 
there was no evidence available to suggest thai,the re-
spondent had used these very components in the manu-
facture' of the CTVs.; that these components could not 
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form the complete CKD Kits of CTVs.; that these compo-
nents could· not have been used in its present form and 
B 
there was a complicated manufacturing processJ_nvolved; 
that not onJy the customs duty was paid on these com-
ponents, treating them as components, but the substan-
tial excise duty was paid on CTVs so manufactured, which 
belied the claim of the Revenue that these were not merely c 
the components, but amounted to the import of CKD Kits 
of CTVs.; and that Rule 2(a) was not attracted. 
Dismissing the appeal, the Court 
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HELD: 1.1 The advanced licenses were issued by D 
the Director General of Foreign Trade (DGFT) to the re-
. spondent for import of com

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