2026-VIL-851-CESTAT-DEL-CU
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CUSTOMS CESTAT Cases

Customs – Classification of relays, feeder management intelligent electronic devices (FMIEDs), Principal function test - Appellant imported four types of electrical relays namely Midos relays, relays for tap changer control and transformer monitoring, K-range relays, and MICOM claiming classification under Customs Tariff Item 8536 49 00 and exemption under Serial Number 376 of Notification No. 12/2012 - Dept issued a show cause notice disputing the classification and claiming the goods were feeder management intelligent electronic devices classifiable under tariff item 8536 90 90 with contact ratings exceeding 7 amperes - Whether the imported goods are relays classifiable under CTI 8536 49 00 or feeder management intelligent electronic devices classifiable under CTI 8536 90 90, and whether they are eligible for exemption under the notification for relays with contact rating up to 7 amperes – HELD - The primary function test enunciated in Section Note 3 to Section XVI of the tariff schedule and affirmed in the Circular dated 19.04.2007 regarding classification of multi-functional products requires that when a composite machine performs multiple complementary functions, classification shall be determined by the machine or component which performs the principal function - The relays are devices used for control, protection and supervision of electrical systems from overcurrent and voltage, and that additional features resulting from technological advancements such as digital displays, data recording and alarm functions are merely ancillary to the primary protective function and cannot alter the core function for which the goods are purchased - The technical brochures identify the goods as relays and that in trade parlance customers specifically placed orders for relays by mentioning specifications and standards - Three of the four products namely Midos relays, relays for tap changer control and transformer monitoring, and K-range relays all had contact ratings of 5 amperes, whereas the Commissioner had erroneously assumed all four products had contact ratings above 7 amperes solely based on the specification of MICOM relays - The appellant had voluntarily paid the differential duty amount for MICOM relays prior to issuance of the SCN - The confirmation of differential duty for the three products other than MICOM along with interest and penalties are set aside. All four products are held to be classifiable under CTI 8536 49 00 as relays. The products except MICOM were declared entitled to exemption under the notification. The imposition of penalties under sections 112 and 114AA of the Customs Act is set aside - The appeals are partly allowed
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GSTAT Appeal filed wrongly...
By CA Vivek Jalan

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