CESTAT New Delhi- Digital Cameras Entitled to BCD Exemption

The Customs, Excise & Service Tax Appellate Tribunal (CESTAT), New Delhi Principal Bench allowed the appeals filed by Sony India, Canon India, Nikon India, and Samsung India Electronics, holding that their imports of digital still image video cameras are eligible for Basic Customs Duty (BCD) exemption under Notification No. 25/2005-Cus. dated 01.03.2005, as amended by Notification No. 15/2012-Cus. dated 17.03.2012.

Background:

The original adjudicating authority (ADG, DRI, New Delhi) had denied BCD exemption, demanding duties for the normal limitation period under Section 28(1) of the Customs Act, 1962.
The Tribunal had earlier dismissed the companies’ appeals in 2017, holding them ineligible for exemption.
The matter escalated to the Supreme Court, which on 07.11.2024, remanded the appeals to CESTAT to be decided afresh, only on the normal limitation period (as extended period under Section 28(4) was already held to be inapplicable).

Key Issues for Consideration:

Whether the imported digital cameras satisfy the conditions for BCD exemption as defined in the Notification and its Explanation.
Whether the Tribunal’s earlier interpretation of the Explanation to the Notification was legally sustainable.

Legal Developments:

A Larger Bench of the Tribunal, in June 2024, reinterpreted the Explanation added via Notification No. 15/2012.
- Held that cameras would qualify for exemption if even one of the threshold conditions (e.g., video recording capability) falls below the limit.
- Rejected the prior interpretation requiring all thresholds to be exceeded to deny exemption.
This was followed by a ruling in Customs Appeal No. 52218/2019 (Nikon India) on 09.09.2024, affirming exemption eligibility.

CESTAT Final Ruling (April 2025):

Confirmed that the digital cameras in question meet the conditions for BCD exemption.
Held that the earlier denial based on misinterpretation of the Notification’s Explanation is no longer sustainable in view of the Larger Bench’s clarification.
Set aside the original adjudication order dated 28.10.2016.
Allowed all four appeals:
- Sony India (Appeal No. 50098/2017)
- Canon India (Appeal No. 50099/2017)
- Nikon India (Appeal No. 50100/2017)
- Samsung India (Appeal No. 50280/2017)

Significance:

Reinforces the principle of liberal interpretation in favor of exemption, where there is no ambiguity in wording.
Provides long-awaited relief to major camera importers entangled in litigation over classification and exemption eligibility.
Strengthens jurisprudence that Explanations in exemption notifications must be interpreted literally and fairly, especially when ambiguity is absent.

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Source: CESTAT New Delhi

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