2026-VIL-1085-CESTAT-DEL-CU
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CUSTOMS CESTAT Cases

Customs – Eligibility to exemption from Social Welfare Surcharge on camera modules for mobile phones under Notification No. 11/2018-Cus - The imported camera modules could only function as digital cameras after being assembled with other mobile phone components and lacked independent features such as internal storage device, output terminals, optical viewfinder, or liquid crystal display in their imported condition - Whether the appellant is eligible to claim exemption from payment of Social Welfare Surcharge under entry no. 30 of Notification No. 11/2018-Cus dated 02.02.2018 while importing camera modules for mobile phones – HELD - The Notification No. 11/2018-Cus dated 02.02.2018 explicitly requires that goods must satisfy two conditions i.e. classification under tariff item 85258020, and second, the goods must answer the description of a "Digital Still Image Video Camera." While the classification condition is satisfied, the second condition is not fulfilled because camera modules are distinct products from digital still image video cameras. Although both may be classified under the same tariff heading, camera modules cannot independently perform the functions of a digital camera at the time of import. A camera module requires assembly with other mobile phone components to function as a digital camera, whereas a digital still image video camera is a standalone product with built-in storage, output terminals, viewfinders, and display features in its imported condition – The functionality similarity at a post-import stage cannot establish that goods satisfy the notification's description requirement at the point of importation. The exemption notifications must be interpreted strictly and the assessee bears the burden of establishing that goods satisfy all conditions specified in the notification. The exclusion of camera modules from the basic customs duty exemption under Notification No. 37/2018 indicates legislative intent to distinguish camera modules from complete digital cameras - The camera modules, being parts of mobile phones that only acquire digital camera functionality after assembly, do not satisfy the description requirement of the notification - the Order-in-Original upholding the demand for Social Welfare Surcharge is upheld. The penalty imposed under section 112(b)(ii) of the Customs Act, 1962 and confiscation of goods are held to be justified – The appeal is dismissed
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