Duty-free goods under specific tariff headings cannot be classified under Heading 9804 for personal imports.

The appellant imported a keyboard for an automatic data processing machine through courier for personal use.

Customs classified the goods under CTH 9804 9000—“Other” dutiable goods imported for personal use—and assessed 10% Basic Customs Duty and 28% IGST under Serial No. 227 of Schedule IV to Notification No. 1/2017-Integrated Tax (Rate).

The appellant contended that keyboards were specifically classifiable under CTH 8471 6040, which carried a “Free” rate of duty, and therefore could not be treated as “dutiable goods” under CTH 9804.

The Commissioner (Appeals), Bengaluru, upheld the assessment by Order-in-Appeal No. 061/2024 dated 14 March 2024, leading to the present appeal.

1. Whether a keyboard specifically classifiable under CTH 8471 6040, where the tariff rate is “Free”, could be reclassified under CTH 9804 9000 merely because it was imported for personal use.

2. Whether the keyboard was liable to Basic Customs Duty and IGST under the entry for “all dutiable articles intended for personal use” in Serial No. 227 of Schedule IV to Notification No. 1/2017-Integrated Tax (Rate).

3. Whether the exemption from foreign-trade restrictions for electronic goods imported for personal use affected their classification or liability to customs duty.

The Tribunal applied Section 12 of the Customs Act, 1962, under which customs duty is levied at rates specified in the Customs Tariff Act, 1975, and Section 2(14) of the Customs Act, which defines “dutiable goods” as goods chargeable to duty on which duty has not been paid.

CTH 8471 6040 specifically covers keyboards for automatic data processing machines and prescribes a “Free” rate of duty, whereas CTH 9804 covers “all dutiable goods imported for personal use”.

Chapter 98, Note 1 permits its headings to apply despite a more specific heading elsewhere, while Note 6 excludes articles imported under an import licence or Customs Clearance Permit from CTH 9804.

The Tribunal relied principally on Associated Cement Companies Ltd. v. Commissioner of Customs, 2001 (128) E.L.T. 21 (S.C.), which held that goods on which no customs duty is leviable under the tariff are not “dutiable articles” for purposes of Chapter 98.

It also considered Section 3(7) of the Customs Tariff Act and Section 5(1) of the IGST Act, 2017, concerning levy of integrated tax on imported goods.

The Tribunal found that the keyboard fell squarely within the specific tariff entry, CTH 8471 6040, which prescribed a “Free” rate; its personal-use character did not displace that classification.

Since CTH 9804 is limited to “dutiable goods” imported for personal use, and the keyboard was not chargeable to customs duty under its specific tariff entry, it could not be brought under CTH 9804.

Applying Associated Cement Companies, the Tribunal held that an article on which no duty is leviable by reason of the tariff itself is not a dutiable article, even when imported for personal use.

Consequently, the corresponding IGST entry for “all dutiable articles intended for personal use” under Heading 9804 was also inapplicable.

The Tribunal rejected the appellant’s separate submission regarding foreign-trade exemptions as unnecessary to the result, observing that Chapter 98, Note 6 addresses goods requiring an import licence or Customs Clearance Permit.

Accordingly, the assessment of 10% Basic Customs Duty and 28% IGST under the personal-use provisions was unsustainable.

The appeal was allowed, with consequential relief, if any.