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TMI Blog2024 (9) TMI 189X X X X Extracts X X X X X X X X Extracts X X X X ..... ssifying them in their appropriate specific chapter headings as provided in the First Schedule to Customs Tariff Act, 1975 : S.No. Imported goods Declared CTH S.No. Imported goods Declared CTH 1. Capacitors 85322990 11. LED Backlight 85414090 2. Resistor 85331000 12. Crystal 85416000 3. Bare PCB 85340000 13. Integrated Circuit / Micro IC 85423100 4. Fuse 85361090 14. Line Cord 85444290 5. Relay 85364900 15. Switching Power Supply Transformer 85043100 6. Connecting Terminals 85369090 16. Silicone Key Pad 39269099 7. Rectifiers (Diodes) 85411000 17. Zebra/ Keypad 40169990 8. Transistor 85411000 18. Spring 73209090 9. Mosfet 85411000 19. Buzzer 84159000 10. IRED 85414020 20. LCD 84159000 Two Speaking Orders No. 30/DC/ICD/IMP/Elite/2022 dt. 27.06.2022 and 35/DC/ICD/IMP/Elite/2022 dt. 20.07.2022 had been passed by Deputy Commissioner of Customs, ICD, Khodiyar determining the classification of Bare PCB, LCD Display, LED Backlight, Line Cord, I.R.E.D LED under CTH 84159000 as "Parts of Air Conditioner and Parts of A.C. Remote System". H ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , as per the impugned Order para 17(i), it has been emphasized by the department that "the Appellant had imported 'Bare PCB' without any surface mounted devices (SMDs) like Capacitor, resistors, Integrated Circuits, transistors, etc. hence these remain classifiable under their respective specific headings of CTA, 1975 as per their condition at time of import, as held by Apex Court in Dunlop India Ltd and Madras Rubber Factory Ltd vs. Union of India [1983 (13) ELT 1566 (SC)] , as per pleadings of the appellant iii. The classification determined by Ld. Commissioner under CTH 84159000 as 'Parts of Air Conditioner' was stated to be incorrect by the appellant since, as per Notes provided under 'Parts' (Section Note 2) of HSN Explanatory Notes to Section XVI, in the second para, it is mentioned that the solely and principally Rules "do not apply to parts which in themselves constitute an article covered by a heading of this Section (most of the said imported goods falling under Chapter 85); and these are in all cases classified in their own appropriate heading even if specially designed to work as part of a specific machine". For above reason and feeling aggrieved by the classificatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o. 50/2017-Cus. dt. 30/06/2017 (Copy enclosed as A/2) and the revised duty structure will be 10% BCD, 10% SWS and 28% IGST. It is submitted that since, the input tax credit is available on IGST and it is revenue neutral situation, the assessing officers at the time of import, preferred to classify the said goods under CTH 39269099 attracting higher rate of BCD, as has been done all over India as per the import data available at VOLZA website (Copy enclosed as A/3). 5. In view of above, it is requested that these facts and submissions may kindly be considered by the Hon'ble Bench, and though, the Appellant had paid excess customs duty but the classification of the said imported item be upheld as declared by the Appellant under CTH 39269099 since, no appeal has been filed by the department against the assessed Bill of Entry as held by the Hon'ble Supreme Court in case of ITC Ltd. vs Commissioner Of Central Excise, Kolkata-IV [2019 (368) E.L.T. 216 (S.C.)] (Copy enclosed as A/4). 6. However, the Appellant do not have any objection even if the classification of the said imported item is decided under CTH 84159000 since, the difference is only of IGST which is revenue neutral as the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nted unassembled or disassembled, usually for reasons such as the requirements or convenience of packing, handling or transport, are to be classified in the same heading as the assembled article. iv. The imported product i.e. goods as mentioned in the Annexure A to the Show Cause Notice are part of AC Remote system presented in unassembled condition and they appear to be appropriately classifiable under Tariff Entry No. 84159000 i.e. parts of Air Conditioner. v. Noticee has accepted the CRA objection; wherein it was pointed out that LCD Display, one of their imported items, is classifiable under Customs Tariff Heading 84159000 and not under CTH 85439000, and accepted the classification of LCD display under Customs Tariff Heading No. 84159000. vi. NIDB data shows that parts of Air Conditioner along with Remote Control have been classified under Tariff Entry no. 84159000 in various contemporaneous imports at various ports in India. Different kind of PCB including PCB for Indoor unit of AC, PCB for Outdoor unit, display PCB etc. have been classified under Tariff Entry No. 84159000. 18. It is contended by the Noticee that Rule 2(a) of the General Rules for Interpretation of Imp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mote Controls (Handsets) etc and for the same they have been importing various components such as Bare PCB, IC, Diode, IR LED, LED Backlight, Transistor, Capacitors, Resistors etc as Parts used for manufacturing of AC Remote system'. Copies of concerned Bills of Entry, submitted by the Noticee, also show that these impugned items have been imported by them by declaring as Parts for AC remote system by classifying under general parts of respective Tariff Headings. It is thus found that the impugned imported items are having primary characteristics of parts of air conditioner/air conditioner remote handsets It is undisputed that these imported items are essential or non-essential components of part of air conditioners or air conditioning remote system Considering these facts, no merit is found in the aforesaid contention of the Noticee. 18.3 Another contention is that they have not only imported the subject goods/components but also procured the same domestically for the manufacturing purposes and therefore the subject goods imported by them under different consignments over different period of time cannot be considered as 'Parts of AC'. This contention is not proper. I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... this case. The Hon'ble Supreme Court in that case held that those goods which are brought not having essential character of Colour TV, it cannot be taken as Colour TV whereas in the present case, the goods for manufacturing Air Conditioners/Air Conditioner Remote handsets are imported by the Noticee under different Bills of Entry by declaring as Parts used for manufacturing of AC Remote system' but classifying them under respective Tariff headings as General Parts. It is evident from the concerned Bills of Entry that even the Noticer have accepted that the imported impugned goods are Parts used for manufacturing of AC Remote system. Thus it is clear that the impugned items would be solely and exclusively used for the manufacture/ assembly of Air conditioners/Air Conditioning remote parts. Therefore, the Hon'ble Supreme Court decision relied by Revenue is distinguishable and not applicable to the present case. 18.5 It is argued that Note 6 to Chapter 85 provides the scope of Printed Circuits and makes it clear that Customs Tariff Heading 8534 covers all types of PCBs wherein other elements such as diodes, triodes or other active elements are not mounted. Hence, PCBs wi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the contrarian submissions, as brought out before us. The appellants are engaged in manufacturing 'Remote Control Handset', PCB Assembled after mounting which are supplied to various Air Conditioner manufacturing companies. Such Remote Control Handsets use approximately 145 components, of which 20 are imported by the appellants. The main item is un-mounted or bare PCB and various 19 other components which have been brought out in the factual matrix given above in table by us are used for mounting. While department is of the view that these un-mounted PCBs or circuit layouts, (commonly known) are specific items and deserve to be classified in Chapter Heading 84159000 of the Customs Tariff Act, 1975. 6.1 We also find that two items i.e. Buzzer and LED were in any case are being classified under Tariff Heading 84159000 and other items were classified under Chapter 85 of CTA by the party excepting silicone keypad, Zebra/Keypad and springs which were classified under Tariff Heading, 39269099, 40169990, 73209090 respectively. 7. Learned Commissioner has applied Rule 2A of General Interpretative Rules (GIR) of HSN treating the goods as presented before the Customs as unassembled or disa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 73209090 in classifying various items as above. In our reasoning, we have been guided by the principle that specific Chapter Notes and Section Notes are to be preferred over General Interpretative Rules while classifying product. The principle was endorsed by the Hon'ble Apex Court in Commissioner of Central Excise, Nagpur Vs. Simplex Mills Co. Ltd-2005 (181) ELT 345 (S.C.) Following para 11 is extracted below:- Para" 11. The rules for the interpretation of the Schedule to the Central Excise Tariff Act, 1385 have been framed pursuant to the powers under Section 2 of that Act. According to Rule 1 titles of Sections and Chapters in the Schedule are provided for 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-I 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 ..... 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