Charging cases for hearing aids that lack power conversion capabilities (AC to DC) and batteries are classified as accessories to hearing aids (TI 9021 9010) rather than static converters (TI 8504 4030), and interpretational classification disputes do not justify the invocation of the extended period of limitation.

PER: DR. SUVENDU KUMAR PATI

In this classification dispute concerning import of ‘charging case without power supply’ provision for ‘hearing aid’ imported by Appellant between October, 2018 and August, 2023 through 247 consignments was reassessed with Basic Customs Duty (BCD) @20% instead of 7.5% being assessed by Appellant, resulted in demand to the tune of ₹1,18,93,367/- alongwith applicable interest and equal penalty by invoking extended period together with redemption fine in substitution of confiscation to the tune of ₹1crore. Show-cause cum-demand notice was issued on dated 19.10.2023 after clearance of all goods that got confirmed in the adjudication process, is assailed in this appeal.

2. Fact of the case would go to reveal that Appellant-Importer had imported Phonac, Unitron, Hansaton make charger cases for “hearing aids” as its accessories and parts during the relevant period and cleared those goods under Tariff Item 9021 9010 of the Customs Tariff Act as “parts and accessory of ‘hearing aid’ and had paid duty @7.5% BCD plus Cess and IGST in terms of Notification No. 50/2017-Cus. dated 30.06.2017 at Sr. No. 563A. Respondent-Commissioner disputed the classification post clearance of goods and covered the same under “Electrical Transformer, static converter (for example rectifiers) and inductors” under Tariff Item No. 85044030 attracting duty @20% BCD plus other charges and through an adjudication process confirmed the same.

3. During course of hearing of the appeal, learned Counsel for the Appellant Mr. J.C. Patel submitted that those charger cases were brought without power supply which were required to be connected with USB compatible power supply with wall plug adopters that would reduce the normal power supply 220 volt AC to 5 volt DC, required for such “hearing aids” to be charged and the charging case acts only as a medium between the wall plug adapter with USB cable and the “hearing aids” kept safely in the said case. He further submitted that the charging case itself does not convert power supply from AC to DC and the said case was just an accessory suitable for use solely or principally with the “hearing aids”. Department classified the same as battery charger under Tariff Item 8504 40 30 which comes under Tariff Item 8504 40 namely “static converter” - an apparatus used to convert electric energy in order to adopt it for further use, as could be seen from the Chapter note on ‘electrical static converter’ which is marked with one dash (-) under which ‘battery charger’ is placed with three (- --) dashes but as because AC to DC converter was not part of the imported item namely charger case and there was no battery available inside the charger case also to retain charge for future use in the “hearing aids”, Appellant’s classification can’t be disturbed since it was incumbent upon the Revenue to establish the burden of classification as settled through precedent decisions namely UOI Vs. Garware Nylons Ltd. - 1996 (87) ELT 12, Nanya Imports & Exports Enterprises Vs. CC – 2006 (197) ELT 154, H.P.L. Chemicals Ltd. Vs. CCE – 2006 (197) ELT 324.

3.1 Further submission on behalf of Appellant is made by learned Counsel on the issue of invocation of extended period which he highly disputed as several Bills of Entry were assessed by the Group Assessing Officer and Bills of Entry No. 9077768 d