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TMI Blog2025 (3) TMI 695X X X X Extracts X X X X X X X X Extracts X X X X ..... the Ld. Adjudicating Authority confirmed the demand along with interest and imposed penalty. In appeal, the Ld. Commissioner (Appeals) upheld the differential demand but however set aside the penalty. Hence this appeal against the duty and interest demanded. 3. Shri Rohan Muralidharan Aravindh, learned counsel appeared for the M/s Flextronics and Shri Anoop Singh, learned Authorized Representative appeared for Revenue. 3.1 The Ld. Advocate for the appellant submitted as follows : (A) The Subject Goods are chargeable to IGST @ 12% as per Sl. No. 203 of Schedule II to Notification NO. 01/2017 - IT (RATE) - It is not disputed that the imported goods are lithium-ion batteries meant for use in cellular mobile phones. The subject goods viz., lithium-ion batteries are integral 'parts' of cellular mobiles without which the mobile phones are incomplete and cannot function. The Ld Advocate stated that S. No. 203 is a more specific heading as lithium-ion batteries used for the manufacture of cell phones is more specific when compared to an entry which covers all lithium-ion batteries which may be for multiple uses such as motor vehicles, electronics, power tools etc. S. No. 376AA is a mo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as per a table which is given below. The period under dispute is from 26.7.2018 to 31.8.2018 IGST - Rate Schedule Period S. No. 203 (12%) S. No. 376AA (18%) S. No. 139 (28%) Prior to 26.07.2018 Parts for manufacture of Telephones for cellular networks or for other wireless networks Was not inserted Electric accumulators, including separators therefor, whether or not rectangular (including square) From 26.07.2018 to 31.03.2020 Parts for manufacture of Telephones for cellular networks or for other wireless networks Lithium-ion Batteries Electric accumulators, including separators therefor, whether or not rectangular (including square) other than Lithium-ion battery and other Lithium-ion accumulators including Lithium-ion power banks Post 31.03.2020 Omitted Lithium-ion Batteries Electric accumulators, including separators therefor, whether or not rectangular (including square) other than Lithium-ion battery and other Lithium-ion accumulators including Lithium-ion power banks IGST rate applicable to Lithium ion batteries. 4.1 It is the appellants contention that; a) The imported lithium-ion batteries are integral 'parts' of cellular mobiles without which the mobil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ut the end use of the batteries at the time of assessment. Neither have they resorted to first check or provisional assessment to resolve any imminent dispute pertaining to IGST rates and description etc. e) It has been held by Higher judicial forums that the Courts shall reject that construction which will defeat the plain intention of the Legislature even though there may be some inexactitude in the language used. The Courts, ae very reluctant to hold that the Parliament has achieved nothing by the language it used when it is tolerably plain what it seeks to achieve. Lithium-ion batteries are likely to be a part or accessory of some machine or equipment, it cannot be the legislative intent that by classifying the impugned goods as per the main equipment or machine S. No. 376AA of Schedule III to Notification No. 01/2017 - IT (Rate), as inserted by Notification No. 19/2018-IT (Rate) dated 26.7.2018 become redundant. 4.3 We find that; a) Goods should be classified based on their description and condition when entered for import. b) As laid down by the Hon'ble Supreme Court in Commissioner of Central Excise v. Simplex Mills Co. Ltd. [(2005) 3 SCC 51 / 2005 (181) E.L.T. 345 (S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uthority. Since the object and purpose is to enable the opposite party to know the case he has to meet with. In the absence of pleading, a party cannot be allowed to project facts that have a major bearing on the dispute to have been accepted, unless specifically expressed by the parties in no uncertain terms. Even a stray line in an order cannot be seen as being conclusive of a fact if the material fact was not raised before the Original Authority and tested through discussion. This is because of the inability of words to always achieve precision and language being an inadequate vehicle of thought. Sometimes words unwittingly convey more than what one meant. As stated by the Hon'ble Justice O. Chinnappa Reddy, in Girdhari Lal & sons Vs Balbir Nath Mathur [(1986) 2 SCC 237],: "6. . . . Words are but mere vehicles of thought. They are meant to express or convey one's thoughts. Generally, a person's words and thoughts are coincidental. No problem arises then, but, not infrequently, they are not. It is common experience with most men, that occasionally there are no adequate words to express some of their thoughts. Words which very nearly express the thoughts may be found but not wor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ity without trying to pass it off as an undisputed matter. i) Even otherwise, S. No. 376AA of Schedule III Notification No. 19/2018-IT (Rate) dated 26.7.2018 covers lithium-ion batteries classified under CTH 8507 6000. There is no special carve out for lithium-ion batteries that are parts of cellular phones as done in the case of S. No. 139 shown at the table at para 4 above. j) The Appellant has averred that S. No. 203 is a more specific heading, as lithium-ion batteries used for the manufacture of cell phones is more specific when compared to an entry which covers all lithium-ion batteries which may be for multiple uses such as motor vehicles, electronics, power tools etc. Even going by the appellant claim of 'parts', we find that "Lithium-Ion Batteries" is the genus (specific heading) and "parts of cellular phones" are, if at all, an indistinct species (residuary heading), thereof. Hence this averment of the appellant has no merits. k) Personal hearing is not an empty formality. However, the appellant has not appeared for the PH on three occasions, which were opportunities not utilized to put forward their points with clarity, especially on the issue of 'parts' among other ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cited by the appellant in their favour. The duty rate notifications for Customs and for IGST purposes are not in pari materia and the description of goods in a customs notification will not help decide the matter either way. It has also been recorded in the impugned order that the appellant has started paying 18% duty from the month of August. Judgments 5. We now examine the judgments stated by the appellant; (A1) The appellant has stated that, lithium-ion batteries are integral 'parts' of cellular mobiles without which the mobile phones are incomplete and cannot function. Reference in this regard was made to the decision of the Hon'ble Tribunal in the case of Jas Telecom [2019 (369) E.L.T. 1515 (Tri. - Bang.)] Further, various decisions have ruled that a part is an essential component of the whole without which the whole cannot function. Reliance in this regard was placed on the following decisions; Commissioner v. Insulation Electrical Private Limited [2008 (224) E.L.T. 512 (S.C.)] and CTO, Anti Evasion, Circle III, Jaipur v. Prasoon Enterprises [2019 (23) G.S. T.L. 441 (S.C.)]. The classification of goods involves an issue of fact and law, which in this case was not agitate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... payer / appellant in their own judicial proceedings. Each Ruling is an authority in the setting of its own facts and will not help advance other appellants cause in their case before judicial fora. (B1) The Income Tax Appellate Tribunal - Mumbai, in the case of Assistant Director Of Income Tax vs Green Emirate Shipping And Travels [(2006) 100 ITD 203 (MUM) / [2006] 286 ITR 60 (MUM)], after referring to the Hon'ble Supreme Court's judgment in Union Of India And Anr vs Azadi Bachao Andolan And Anr [AIR 2004 SUPREME COURT 1107], held that the Authority for Advance Rulings, not being a part of the judicial hierarchy, cannot lay down a binding precedent for anyone - the Revenue, the assessees or the appellate authorities. (C) The appellant has stated that The Principle of Contemporaneous Expositio states that a statute must be constructed or interpreted in the manner in which the administrative or executive officers enacting the statute have interpreted the statue. Reliance in this regard is placed on the decision of Spentex Industries Ltd. v. Commissioner of Central Excise [2015 (324) E.L.T. 686 (S.C.)]. They have also referred to the recommendation of GST Council as being highly p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the precedential value of a decision". The facts being distinguished, the ratio in JMK Energy (supra) is hence not applicable. No Interest or Penalty is leviable in the absence of machinery provision 6. The Appellant submits that IGST is levied under Section 3(7) of CTA. However, the CTA has limited provisions, and it borrows various provisions from the Customs Act for implementation of its provisions. Section 3(12) of the CTA, which is the borrowing provision with regard to IGST, did not borrow provisions of interest from the Customs Act. Therefore, it is submitted that interest cannot be recovered for non-payment of IGST which is chargeable under Section 3 of the CTA. 6.1 Section 3(12) of the Customs Tariff Act, 1975, as it stood just prior to the Finance (No 2) Act 2024 been notified on 16th August 2024, is extracted below for ease of reference: 3(12) The provisions of the Customs Act, 1962 (52 of 1962) and the rules and regulations made thereunder, including those relating to drawbacks, refunds and exemption from duties shall, so far as may be, apply to the duty or tax or cess, as the case may be, chargeable under this section as they apply in relation to the duties lev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... [2023 (8) TMI 135 - SC ORDER]. 6.3 We also notice that Section 3(12) of the Customs Tariff Act has been substituted, vide Finance (No 2) Act 2024 which was notified on 16th August 2024, specifically including 'interest' among others measures. The new sub-section is reproduced below. "(12) The provisions of the Customs Act, 1962 and all rules and regulations made thereunder, including but not limited to those relating to the date for determination of rate of duty, assessment, non-levy, short-levy, refunds, exemptions, interest, recovery, appeals, offences and penalties shall, as far as may be, apply to the duty or tax or cess, as the case may be, chargeable under this section as they apply in relation to duties leviable under that Act or all rules or regulations made thereunder, as the case may be.". (emphasis added) The legislature having now incorporated 'interest' into the Customs Tariff Act, 1975, the same can be demanded for non-payment of IGST only after the substitution of the said sub-section as above, from 16.08.2024 and not on the impugned goods which were imported before that date. The appellants prayer hence succeeds on this issue. 7. In the light of the discussions ..... X X X X Extracts X X X X X X X X Extracts X X X X
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