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Molex India Pvt. Ltd. Versus Commissioner of Central Excise, Customs and Service Tax Bangalore-I

2016 (5) TMI 394 - CESTAT BANGALORE

Classification - Photo Sensors imported - Whether goods are to classified under Chapter Heading 8541 40 as per appellant or under Chapter Headings 9031 as per respondent - Petitioner contended that their product is not a kind of measuring and checking instruments covered under Chapter Heading 9031 of Customs Tariff. Also not a measuring or checking instrument, appliance and machine, covered as inclusion in the Chapter Heading 9031 of Customs Tariff's Explanatory Notes 1(A)7.

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h LED and phototransistor receives the light. In this way the item gives a signal, whenever light is obstructed, when some other substance or a thing comes in between. In this way whenever there is obstruction and there is no signal received by phototransistor, the outcome again will be a kind of signal and that is used in signal receiving machines/instrument to know that how many times there is restriction/obstruction in receiving light. In this way this item is being used by the appellants for .....

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e that how the item in question is a measuring or checking instrument to be covered under CTH 9031.8000. Therefore, the subject item is covered by 8541.40 and it cannot be covered under the Chapter Heading 9031.8000. - decided in favour of appellant with consequential relief - C/22445/2014-DB - Final Order No. 20229 / 2016 - Dated:- 9-2-2016 - SMT ARCHANA WADHWA, JUDICIAL MEMBER AND SHRI ASHOK K. ARYA, TECHNICAL MEMBER For the Petitioner : Shri Pulak Saha & Shri Shailendra Sukhlecha, Authori .....

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The appellants were not convinced with the classification under Chapter Headings 9033 or 9031, therefore, they went in appeal before Commissioner (Appeals), who passed an order dated 30.09.2011 (issued on 30.10.2011), wherein he set aside the assessment orders as not maintainable and directed the lower authority to pass speaking order under Section 17(5) of Customs Act 1962. 1.1. Thereafter Deputy Commissioner, Group 5A, Bangalore Air Cargo Complex passed an order-in-original No. 761/2013 dated .....

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e Commissioner (Appeals), who vide the Order No. 06/2014 dated 16.04.2014 rejected the appeal of the appellants. 1.3. M/s. Molex India Pvt. Ltd. are now before this Tribunal challenging the order of Commissioner (Appeals), who sustained the Deputy Commissioners Order inter alia holding Photo Sensor to be classified under Chapter 9031.8000. 2. Appellants today during hearing have shown the item also, which they are calling as Photo Sensors and they are referring to one letter dated 1st August 20 .....

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he presence of visible light and infrared transmission. These photo sensors consist of semi conductor having property photo conductivity. These are semi-conductor devices as they can function within 24V. Considering the above functionality, these are nothing but a photo sensitive semi-conductor device. 2.1. The appellants further say that their product is Photo Sensor and it is not a kind of measuring and checking instruments covered under Chapter Heading 9031 of Customs Tariff. They state that .....

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nts for measuring length, angles or other geometrical quantities using such sensors. The heading also includes recording comparators, and comparators fitted with a mechanical device which conveys mass produced parts to the comparator and eliminates defective parts. However, this heading does not include the dial type comparators for use in the hand described in Item (4) of Part (D) of the Explanatory Notes to heading 90.17. By referring to above HSN Notes to Chapter Heading 90.31 the appellants .....

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ifiable within heading 8541, Harmonized Tariff Schedule of the United States Annotated (HTSUSA), which provides for photosensitive semiconductor devices; or classifiable within heading 8536, HTSUSA, which provides for electrical apparatus for switching electrical circuits. This Ruling issued by Director Rulings Division holds that Photo Sensor at issue is properly classifiable within subheading 8541.40.80, HTSUVA, which provides for optical couples isolators. 2.3. Appellants are also referring t .....

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es to Chapter Heading 85.41. 2.3.1. HSN Explanatory Notes to Chapter Heading 85.41 in its Section (B) on Photosensitive Semiconductor Devices inter alia explain as below. Firstly we are quoting Tariff Heading Entries/Description. 3. Revenue represented by learned AR Shri Pakshi Rajan inter alia argues that item is rightly covered under Chapter 9031. He refers to order-in-original issued by Deputy Commissioner wherein the Hon ble Supreme Court s decision reported in 2010 (258) ELT 321 (SC) - LML .....

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1 is further strengthened by the data downloaded from the NIDB as per which generally all types of sensors are classified under CTH 9031/9032 in major customs houses like Mumbai and Chennai and by other importers in Banaglore. 4. The facts on record and the submissions of both sides have been carefully considered. 4.1. Revenue has mainly argued that based on HSN Notes the classification for the goods in question would be 9031.8000. However their reasoning for this classification does not match w .....

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nspecting photomasks or reticles used in manufacturing semiconductor devices 9031.49 - Other 9031.80 - Other instruments, appliances and machines 9031.90 - Parts and accessories In addition to profile projectors, this heading covers measuring or checking instruments, appliances and machines, whether or not optical. 4.1.1. Further impugned order-in-appeal dated 16.04.2014 in para 6 quoting Explanatory Notes to HSN to CTH 9031 (I)(A)(7) writes as below: Dial indicating comparators, micrometric dev .....

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) of the Explanatory Notes to heading 90.17 (see exclusion (d) above) . Commissioner (Appeals) in this Order-in-Appeal further in para 6 writes as below: As HSN includes sensors under CTH 9031, the appellant s contention of disputing the classification of sensor under CTH 9031 and contending to classify under CTH 8548 is not legally sustainable. The appellants contention that the device is only a semiconductor device meriting classification under Heading 8541 4090 is not acceptable as the devi .....

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mpletely fails to indicate or prove that what kind of measurement or checking this particular item was doing. The Order-in-Original as well as Order-in-Appeal mentions Honble Supreme Courts decision in the case of LML Ltd. Vs. Commissioner of Customs (supra) but this decision of Honble Supreme Court only says that HSN Explanatory Notes are dependable guide for interpretation of Customs Tariff. However HSN Explanatory Notes have to be used by applying proper reasoning and after considering whe .....

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nal mentions that its conclusion is strengthened by the data downloaded by the NIDB saying that all types of sensors are classified under CTH 9031/9032 in major customs houses like Mumbai and Chennai and by other importers in Bangalore does not give any support, when there are no details given of the specific clearances of such classifications adopted by other Custom houses or by any other importer in Bangalore. This kind of statement without any specific documentary evidence serves no purpose a .....

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T, New Delhi held that oxygen sensors are to be classified under Chapter Heading 9031 and not under Chapter 90.27 of the Customs Tariff. It is to be noted that in this decision of CESTAT, Delhi the subject item was oxygen sensor and not the impugned item which is a photo sensor. In that decision the dispute was whether the item deserves classification under Chapter Heading 9027 or 9031. There was no reference to the Chapter Heading 8541. Therefore, this decision of CESTAT, New Delhi is not relev .....

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nction of sensing by emitting and receiving lights between LED and Phototransistor which are placed at a distance on a plastic housing. A photo sensor is an electronic component that detects the presence of visible light and infrared transmission. These photo sensors consist of semi conductor having property photo conductivity. These are semi-conductor devices as they can function within 24V. Considering the above functionality, these are nothing but a photo sensitive semi-conductor device. 4.5. .....

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lassification under CTH 8541.40 or 9031.8000. The appellants stand is that item deserves classification under 8541.40 which was the classification whereunder customs were clearing these goods till January 2011. Revenues current stand is that correct classification for the goods is 9031.8000, whereunder the customs has been assessing and clearing the goods since May 2011. 5.1. Here our main basis for classification is HSN Explanatory Notes to Chapter Headings 9031 and 8541. Descriptive Entries .....

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ial categories of photovoltaic cells covered therein. Said Section B (iii) is given below: (iii) photocouples and photorelays consisting of electroluminescent diodes combined with photodiodes, phototransistors or photothyristors. Photosensitive semiconductor devices fall in this heading whether presented mounted, packaged or unmounted. 5.1.1. The item in question is photocouples means it is a combination of LED (Light Emitting Diodes) and phototransistors. The impugned item is specifically menti .....

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thing comes in between. In this way whenever there is obstruction and there is no signal received by phototransistor, the outcome again will be a kind of signal and that is used in signal receiving machines/instrument to know that how many times there is restriction/obstruction in receiving light. In this way this item is being used by the appellants for manufacturing harness connectors which are then supplied to ATM manufacturing companies. 5.2. Revenue s argument is that the item in question i .....

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decision in the case of LML Ltd. Vs. Commissioner of Customs (supra) cannot support their case at all, which only says that HSN Explanatory Notes are a dependable guide for deciding the classification of any item. For making use of HSN Explanatory Notes as a guide we have to read the Notes specifically with regard to the contents and characteristics of the item in hand. 5.3. Here we also refer to Cross Ruling 088341 dated February 26, 1991 referred earlier submitted by the appellants. The Rulin .....

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l coupled isolators, currently dutiable at the rate of 4.2 percent ad valorem. 5.4. We also would like to refer to certificate dated 01.08.2011 signed by Associate Professor, M.K. Gunasekaran of Centre for Electronics Design and Technology, Indian Institute of Science, Bangalore submitted by the appellants. It has been reproduced below: 5.5. Further we refer to Chapter Note 8 to Chapter 85 which inter alia says as below: 8. For the purposes of headings 8541 and 8542: (a) Diodes, transistors and .....

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