The Supreme Court exempted LG Electronics India (appellant) from payment of customs duty on the “G Smart Watch” imported from the Republic of Korea, by holding that its classification within Entry 8517 6290 as a ‘timekeeping device’, shall not disentitle it from seeking the benefit of the Notification No.152/2000–CUS dated December 31, 2009, which exempts certain goods falling under the First Schedule to the Customs Tarriff Act, 1975, that where imported into India from the Republic of Korea.
The Two Judge Bench comprising Justice J.B. Pardiwala and Justice Sandeep Mehta observed that the Certificate of Origin declared by the exporter and certified by the Customs Department makes it very clear that the goods were imported and originated from the Republic of Korea. Accordingly, the Bench allowed the appeal in favour of LG Electronics.
Reference was made to the submissions of the Department’s counsel regarding the condition precedent in applying the Notification 151/2009, as per which that the importer has to declare the place of origin and must produce the Certificate of Origin in accordance with the Customs Tariff (Determination of Origin of Goods under the Preferential Trade Agreement between the Governments of the Republic of India and the Republic of Korea).
The Bench also noted that while trying to bring the case within Entry 9102 1900, the appellant (importer) has portrayed that what was imported were actually wrist watches, and though there may be a particular device in the same, the same would not bring such goods within the ambit of Entry 8517 6290.
Briefly, in this case, the L.G Electronics (appellant) had imported 2000 units of G Smart Watch from the Republic of Korea vide two bills of entry and classified the said goods under CTH 9102 1900 and accordingly assessed the basic customs duty at NIL rate, after claiming the benefit of Entry Sl. No.955 of Notification No.152/2000–CUS dated December 31, 2009. The appellant contended that what was imported were wrist watches, whereas the Department was of the view that they might be wrist watches but with a mechanism by which the person wearing the same can receive, converse, or transmit the voice with data.
The CESTAT recorded that the appellant did pay IGST@ 18% and opined that what was imported were smart watches and hence, the main benefit that the person using it would derive is to constantly update himself, receive or transmit data. The CESTAT, therefore, concluded that a smart watch is a wearable computing device that closely resembles a wrist watch or other timekeeping device, and therefore, the imported goods would fall within Entry 8517 6290. Still, claiming exemption from payment of customs duty in light of the Notification No.151/09 dated December 31, 2009, the appellant approached the Apex Court.
Appearances:
Senior Advocate V. Lakshminarayan, AOR Charanya Lakshmikumaran, along with Advocates Neha Choudhary, Umag Motiyani, Nitum Jain, Ayush Agarwal, Medha Sinha, and Swastik Mishra, for the Appellant/ Taxpayer
AOR Gurmeet Singh Makker, along with Advocates V.C. Bharathi, Udai Khanna, Gayatri Mishra, and Bharti Tyagi, for the Respondent/ Revenue
