Goods supplied from SEZ to individual customers in DTA for personal use are not covered under TI 9804 90 00

The CESTAT Chennai has held that laptops, desktops and monitors cleared from SEZ to the DTA, to individual customers for their personal use, are classifiable under Tariff Items 8471 30 10, 8471 50 00 and 8528 52 00. Department’s submission that the goods would be classifiable under TI 9804 90 00 covering ‘All dutiable articles, intended for personal use’, was thus rejected. According to the Tribunal the specified goods were neither ‘dutiable goods’ nor were ‘imported for personal use’. It was observed that, 

Dutiable goods
 

• Basic Customs Duty as specified in Customs Tariff Act is ‘free’ for two of the 3 specified goods. For third item, exemption notification prescribes nil rate of BCD.
• Goods cannot be regarded as ‘dutiable goods’ when goods are not subjected to duty, being ‘free’ under the Customs Tariff Act or by exemption, as held in Associated Cement Companies Ltd. v. Commissioner.
• Levy of IGST will not per se render the goods ‘dutiable goods’, as levy of IGST is under the IGST Act and, at best, under Section 3 of the Customs Tariff Act, 1975.
   

Importation for personal use
 

• Importation for personal use necessarily connotes the use of the importer himself. Sales to customers is not ‘personal use’ as contemplated by Heading 9804.
• Chapter 98 covers goods actually brought into India from a place outside India and used for personal purposes. ‘SEZ to DTA’ transactions are not covered here. 
• Goods procured on orders cannot conceivably be characterized as ‘baggage’.
• Had the transaction been carried out, otherwise than through an SEZ, the Department would not have been suggested that a duty would be leviable thereon. Supreme Court’s decision in Adani Power Ltd. v. Union of India was relied upon. 
• Reliance on customization and nature of use to treat the customers as importers was not correct. 
• Purpose of use of the customer of the importer is not a fact which is determinable at the time of importation.
• No legal fiction to suggest the assessee/appellant was not importer.
   

Also, the Tribunal in Dell International Services India Private Ltd. v. Principal Commissioner [2026 VIL 475 CESTAT CHE CU] observed the following.
 

• Department to first establish that declared classification was wrong and then justify its reclassification. Adjudicating authority jumped on the second aspect without discharging burden of proof for first. 
• Recovery by applying the provisions of SEZ Act is barred under Article 265 of the Constitution and is contrary to the authorization prescribed under SEZ Rule 47(5).
   

The assessee was represented by Lakshmikumaran & Sridharan Attorneys here.