TMI Blog2022 (8) TMI 873X X X X Extracts X X X X X X X X Extracts X X X X ..... ent case, it is not in dispute that not even a single consignment was cleared or removed from the factory of the appellant to the manufacturers containing all the parts of CTVS at the same point of time. All the consignment of sub-assemblies/parts (except for 21 Flatron) the colour picture tubes were not supplied and the colour picture tubes were always purchased by the manufacturers from the picture tubes manufacturers directly - when the consignments cleared by the appellant did not contain all the parts at the same point of time, Interpretative Rule (a) cannot be pressed into service - It is, therefore, not possible to accept the contention of the learned authorized representative appearing for the Department that complete assemblies/sub-assemblies of CTVS were supplied to the original equipment manufacturers. Even otherwise, rule 2(a) could not have been invoked for the reason that classification of the goods in the present case would be governed by Section Note 2 to Section XVI of the Central Excise Tariff and the Rules of Interpretation would not be applicable at all - in view of Rule 1, sub-assemblies and parts cleared by the appellant are to be classified under Heading ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was paid. It needs to he noted that during the period in question, both the CTVS and the parts attracted the same rate of central excise duty. 6. During the period in question, the appellant cleared the sub-assemblies/parts of CTVS to the following manufacturers on payment of central excise duty: (1) Dixon Utility Exports Ltd., Mohali; (2) Digitech Industries, West Bengal; (3) Clear Vision Industries, Madhya Pradesh; (4) Polygentic Technologies, Maharashtra; (5) Laxmi Electronics, West Bengal; and (6) Iris Electronic India Pvt. Ltd.; Bihar 7. The above manufacturers, with the help of the parts/sub-assemblies received from the appellant and also after procuring some of the components/parts from the other manufacturers, manufactured complete CTVS and cleared them on payment of central excise duty on the basis of MRP declared on the package. The two most critical parts in the manufacture of CTV are picture tubes and populated printed circuit boards. In respect of all, other than the parts for the manufacture of Flatron 21 CTV, the appellant had not supplied the picture tubes to these manufacturers from its factory. The picture tubes were purchased/procured b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... following submissions: (i) Interpretative Rules 2(a) of the Central Excise Tariff has no application to the facts of the present case for the reason that Interpretative Rules 2(a) can be applied if and only if all the components which form part of the assembly or complete or finished goods are removed together at the same point of time. In support of this contention reliance has been placed on the Larger Bench decision of the Tribunal in Sony India Ltd. vs. CC [ 2002 (143) E.L.T. 411 (Tri.-LB) ] as also the judgment of the Supreme Court in CC vs. Sony India Ltd. [ 2008 (231) E.L.T 385 (SC) ] arising out of the aforesaid decision of the Tribunal; (ii) Rule 2(a) is also not invokable for the reason that classification of the goods in question is governed by Section Note 2 to Section XVI of the Central Excise Tariff and hence rules of Interpretation cannot be invoked at all. In support of this contention reliance has been placed on the judgment of the Supreme Court in CCE vs. Simplex Co. Ltd. [ 2005 (181) E.L.T. 345 (SC) ], wherein the primacy of rule 1 over the other rules of interpretation was stressed; (iii) The Commissioner committed an error in placing reliance on the f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (iii) The Central Board of Excise and Customs has also examined the classification in the Circular dated 03.02.1994 issued by them; (iv) The judgment of the Supreme Court in Salora International would apply to the facts of the present case; (v) The quantification of demand made in the show cause notice is correct; (vi) The contention of the appellant that the demand is revenue neutral is incorrect in view of the decision of the Supreme Court in Salora International; (vii) The extended period of invocation has been correctly invoked; (viii) The demand for inputs removed to depots on the value of goods at the time of removal in the show cause notice is correct; (ix) Interest has been correctly demanded from the appellant and penalty has also been correctly imposed; and (x) S.N. Rai and Atul Tadon are also liable for imposition of personal penalty because they held responsible positions and had indulged in abetting evasion of duty; 14. The submissions advanced by the learned counsel for the appellant and the learned authorized representative appearing for the Department have been considered. 15. The first issue that arises for consideration is regarding Int ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e observations are: 16. We thus come to the core dispute in this appeal whether the different parts imported under 94 Bs/E spread over the period from April, 1995 to January, 1997 can be combined together for the purpose of assessment by applying Rule 2(a), of the Interpretative Rules. Going by the language of Rule 2(a) the question whether parts or components are to be treated as article complete or finished, has to be considered at the time when they are presented unassembled or disassembled. There is no case for the Revenue in these proceedings that at some point of time before the import the goods were in the form of CTV sets and thereafter they were disassembled and imported as parts or components. The contention is that parts in 94 consignments taken together should be treated as CTV sets presented unassembled. ***** It is not the case of the Revenue that import of the consignment covered by any of the 94 Bs/E is in contravention of law if the goods comprised therein are to be treated as parts of components. Assessments were also being made under the relevant heading or sub-heading in respect of each component as and when Bs/E were presented during the relevant period. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dia and Madras Rubber Factory Ltd. v. UOI [1983 (13) E.L.T. 1566 (S.C.). 12. Shri Lakshmikumaran argues on the basis of a German Court decision on which the Tribunal also relied upon. According to the learned counsel in that decision Rule 2(a) was considered and the Court took the view that the article is to be considered to be imported in unassembled or disassembled where the component parts, that is the parts which may be identified as components intended to make up the finished product are all presented for customs clearance at the same time. The interpretation that we have given to Rule 2(a) would mean that Rule 2(a) would be applicable only and only if all the components which are intended to make a final product would have to be presented at the same time for customs clearance. Such is not the case in the present situation where the goods have been brought in 94 different consignments. (emphasis supplied) 20. In the present case, it is not in dispute that not even a single consignment was cleared or removed from the factory of the appellant to the manufacturers containing all the parts of CTVS at the same point of time. All the consignment of sub-assemblies/par ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or ease of reference only. But for legal purposes, classification shall be determined according to the terms of the headings and any relevant section or Chapter Notes . If neither the heading nor the notes suffice to clarify the scope of a heading, then it must be construed according to the other following provisions contained in the Rules. Rule-l gives primacy to the Section and Chapter Notes along with terms of the headings. They should be first applied. If no clear picture emerges then only can one resort to the subsequent rules. 24. In Salora International, the Supreme Court also clarified the legal position as follows: 18. The main question that arises for consideration in this case is that of the applicability or otherwise of Rule 2(a) of the Rules for Interpretation to the goods of the Appellant, and the effect of Section Note 2 to Section XVI of the Tariff, reproduced above, on the applicability of such provision. 19. On the question of the applicability of the Rules for Interpretation vis- -vis the Section Notes and Chapter Notes in the Tariff Schedule, the rule laid down by this Court in Commissioner of Central Excise, Nagpur v. Simplex Mills Co. Ltd. - (2005) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... herein, shall in all cases be classified in their respective heading. In that light, the fundamental enquiry in this case must be that of whether the goods produced by the appellant may be said to be covered by the above Section Note. 23. In view of the above mentioned Section Note, the question that arises here is whether the goods produced by the appellant can be described as parts under the goods included in any of the headings of Chapter 84 or 85. In this respect, it is the contention of the appellant that the goods produced by them shall inevitably have to be considered as parts , as they are unable to receive a picture, which is said to be a fundamental requirement for a good to be considered as a Television Receiver . At the first sight, one may find force in this contention. As the test in Section Note 2 is simply that of whether the goods in question are parts , it may be convincingly said that as the goods transported by the appellant are incapable of functioning as Television Receivers , they shall have to be considered to be parts thereof. 24. However, on closer scrutiny of the unique facts of this case, it is our view, the goods of the appellant may not ..... 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