Duty Exemption Granted to LG Electronics India for Smartwatch Imports
Introduction
The Supreme Court of India has granted relief to LG Electronics India, exempting the company from paying customs duty on imported ‘G Watch W7‘ smartwatches from South Korea. The court’s decision was based on the India-Korea Comprehensive Economic Partnership Agreement (CEPA) and Notification No. 151/2009, which provides for a complete duty exemption for goods of South Korean origin.
Factual Background
LG Electronics India had imported ‘G Watch W7‘ smartwatches from South Korea and claimed exemption from customs duty under Notification No. 151/2009. However, the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) rejected the claim, holding that the imported watches fell under CTH 8517, which attracted a higher duty.
Procedural Background
The CESTAT’s order was challenged by LG Electronics India before the Supreme Court. The company argued that even if the imported watches were classified under CTH 8517, they were entitled to complete duty exemption under Notification No. 151/2009, applicable to goods of South Korean origin under the CEPA.
Issues
The primary issue before the Supreme Court was whether LG Electronics India was entitled to exemption from customs duty on the imported smartwatches under Notification No. 151/2009.
Contentions of the Parties
Appellant: LG argued that the company had obtained a valid Certificate of Origin from the Korean authority, establishing that the goods were produced in South Korea. Therefore, LG was entitled to a complete duty exemption under Notification No. 151/2009.
Respondent: The respondent argued that the necessary Certificate of Origin had not been submitted at the assessment stage, and therefore, the benefit of exemption could not be claimed.
Reasoning and Analysis
The bench of Justice JB Pardiwala and Justice Sandeep Mehta held that the Certificate of Origin issued by the Korean authority was sufficient to claim the exemption. The court noted that the original Certificate of Origin was not disputed, and therefore, LG Electronics India was entitled to the benefit of Notification No. 151/2009.
Relief Sought
The appellant sought exemption from customs duty on the imported smartwatches. The Supreme Court allowed the appeal, setting aside the CESTAT’s order and granting relief to LG Electronics India.
In this case the appellant was represented by Mr. V. Lakshminarayan, Sr.Adv., Ms. Neha Choudhary, Mr. Umag Motiyani, Ms. Nitum Jain, Mr. Ayush Agarwal, Ms. Medha Sinha, Mr. Swastik Mishra and Ms. Charanya Lakshmikumaran, AOR.
Meanwhile the respondent was represented by Mr. V.C. Bharathi, Mr. Gurmeet Singh Makker, AOR, Mr. Udai Khanna, Ms. Gayatri Mishra and Ms. Bharti Tyagi, Advocates.