Balloons Used For Decorations Outside The Purview Of Requirement To Satisfy BIS Registration, CESTAT Set Aside Confiscation Order

The Chennai bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has quashed the order passed by the original authority confiscating the goods and directing their re-export.

The bench of Sulekha Beevi C.S. (Judicial Member) and Vasa Seshagiri Rao (Technical Member) has observed that the balloons used for decorations are outside the purview of the requirement to satisfy BIS registration as these are not intended to be used as toys.

The appellant is engaged in providing party decorations using rubber latex and foil balloons. Such decorations are usually made at birthday parties, public and private events, or functions.

The appellant imported balloons for party decorations, pumps, and balloon stands for decoration purposes from M/s. Gemar Balloons, Italy, and filed a bill of entry, which was self-assessed by their CHA as toy balloons. The total declared value of the goods was Rs. 3,77,952. On examination, it was noted by the department that the goods do not conform to BIS.

The appellant was given a query about the said issue, to which the appellant replied, stating that the balloons were imported for party decorations and not for use as toys for children.

After due process of law, the Original Authority ordered the confiscation of the goods valued at Rs. 3,77,952/- with an option for the appellant to re-export these goods within 30 days of the order by payment of a redemption fine of Rs. 30,000/- under Section 125 of the Customs Act 1962 or an order for the destruction of the same at the cost of the importer as per the rules.

A penalty of Rs. 25,000/- was imposed under Section 112(a) of the Customs Act 1962. Against such an order, the appellant approached the Commissioner (Appeals), who upheld the same.

The appellant contended that the balloons under import are only for party decorations and never meant for use in play by children. The shipment contains balloons of sizes 5 inches, 12 inches, and 19 inches. These balloons are for the purpose of decoration only. The balloons of 5 inches are too small to be used by children, and the balloons of 12 and 19 inches are too large and hence can be used for decoration purposes only. If at all possible, it can be said that 9-inch balloons are ideal for kids, and the shipment doesn't contain this item. In any case, the goods being imported are used only for party decorations and are never sold to children as toys. Hence, these balloons in the consignment are meant for party decoration only and cannot be considered toys. The requirement of compulsory registration under BIS is applicable only for toys that are meant for use in play by children, and the subject goods are never intended to be used as toys.

The department contended that the appellant had declared the goods "toy “balloons” under CTH 95030099. The contention of the appellant that these are not used for toys and are meant for decoration purposes cannot be accepted. Since the goods are declared toy balloons, the law requires compliance with BIS markings on the goods reported, which is crucial, and therefore the original authority has correctly confiscated the goods and given an option for re-export of the goods.

The tribunal noted that the appellant has consistently, from the very beginning, contended that they are engaged in the business of making decorations using balloons, and the goods (balloons) imported were intended to be used only for decoration. The department has not been able to establish otherwise. As per the list of items shown in IS 9873 (Part I), The 2012 item at (k) shows that holiday decorations that are primarily intended for ornamental purposes are excluded. Thus, goods used for decoration are excluded. The said item at (k) does not make any distinction or differentiation based on the material used in the balloon. Further, in the present case, the appellant offered to test the goods as to the nature of the material used. The department did not conduct any tests.

The CESTAT has stated that the order passed by the original authority confiscating the goods and directing their re-export cannot be sustained. The impugned order is set aside. The goods are to be released to the appellant on payment of any applicable duty, if any. The redemption fine is also set aside.

Counsel For Appellant: Sobhana Krishnan

Counsel For Respondent: The Commissioner of Customs

Case Title: M/s. Bubbly Balloons Versus The Commissioner of Customs

Case No.: Customs Appeal No.40424 Of 2023

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