CESTAT Mumbai Sets Aside ₹1.18 Crore Customs Demand on Sonova Hearing India in Classification Dispute

April 17, 2026 : The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Mumbai Bench has allowed the appeal filed by Sonova Hearing India Pvt. Ltd., setting aside a customs duty demand of ₹1.18 crore arising from a classification dispute over imported charging cases used with hearing aids.

The dispute related to 247 consignments imported between October 2018 and August 2023. The importer had classified the goods under Tariff Item 9021 90 10 as “parts and accessories of hearing aids,” attracting a basic customs duty of 7.5%. However, the department reclassified them under Tariff Item 8504 40 30 as “electrical static converters,” which carry a higher duty of 20%, and raised a demand of ₹1,18,93,367 along with interest, penalty, and a redemption fine of ₹1 crore.

A Division Bench comprising Judicial Member Dr. Suvendu Kumar Pati and Technical Member M.M. Parthiban examined whether the imported product—described as a “charging case without power supply”—could be treated as a static converter or battery charger.

The Tribunal accepted the importer’s contention that the charging case did not contain any power supply, battery, or electrical conversion mechanism. Instead, it functioned merely as a conduit between a USB-compatible wall adapter and the hearing aids placed inside it. The Bench relied on the Chartered Engineer’s certificate and product literature, which confirmed that the device neither converted electrical energy nor stored power.

Significantly, the Bench also conducted a physical examination of the product during the hearing. Upon opening the charging case, it was found to contain no battery. The Tribunal observed that even if viewed broadly, the device was designed solely for use with hearing aids and therefore qualified as their accessory.

Rejecting the department’s classification, the Tribunal reiterated that the burden of proof to reclassify goods lies on the revenue authorities. In this case, it found that the department failed to establish that the product had the essential characteristics of a static converter—namely, the ability to convert electrical energy from one form to another.

The Bench also took note of the fact that earlier consignments had been assessed and even physically examined by customs authorities, who had accepted the importer’s classification. This undermined the department’s case, particularly on the issue of extended limitation.

On limitation, the Tribunal held that the extended period could not be invoked as there was no suppression or misstatement by the importer. It emphasized that the dispute was interpretational in nature and did not justify penal consequences.

In its final ruling, the Tribunal categorically held that the goods were correctly classifiable under Tariff Item 9021 90 10 as parts and accessories of hearing aids, and rejected the department’s attempt to classify them as static converters under Tariff Item 8504 40 30.

Accordingly, the Tribunal set aside the entire demand of ₹1.18 crore along with interest, penalty, confiscation, and redemption fine, allowing the appeal with consequential relief.

Case Title: M/s. Sonova Hearing India Pvt Ltd. v. Commissioner of Customs – Air Cargo Complex, Mumbai
Case No.: Customs Appeal No. 87752 of 2024