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TMI Blog2025 (5) TMI 416X X X X Extracts X X X X X X X X Extracts X X X X ..... estion and, hence, these are being disposed of together. The question involved in all these appeals is whether the importers were entitled to the benefit of Notification No. 25/1999-CUS dated 28.02.1999 (Sl. No. 62) and Notification No. 24/2005-CUS dated 01.03.2005 (Sl. No. 39) on the "aluminium based Copper Clad laminates" which they had imported and used after following the procedure prescribed in the Customs (Import of Goods at concessional rate of duty for manufacture of excisable goods) Rules, 2017 [2017 Rules] to manufacture "aluminium clad printed circuits boards" or not. 2. In Customs Appeal No. 50030 of 2024 - M/s Vintek Circuits India Pvt. Ltd. [Vintek] assailed the order-in-original dated 13.10.2023 passed by the Principal Commissioner of Customs (Preventive), New Delhi [Principal Commissioner], whereby he denied the benefit of the aforesaid two notifications, demanded recovery of differential customs duty and imposed penalties. 2.1 Customs Appeal No. 55372 of 2023 is filed by the Commissioner of Customs (Preventive), New Delhi to assail the order-in-appeal dated 18.05.2023 passed by the Commissioner of Customs (Appeals) [Commissioner (Appeals)], whereby he allowed the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he importer - Vintek while in the other three appeals, Revenue is assailing the orders passed by the Commissioner (Appeals) allowing the benefit of the exemption notifications. 2.5 The importers in all these cases imported copper clad aluminium based laminates and used them to manufacture aluminium clad printed circuits boards. The two notifications provided for exemption to copper clad laminates which are used to manufacture printed circuits boards. The question is whether "printed circuits board" includes "aluminium clad printed circuits boards" also and whether the laminates which are imported with aluminium base will also be entitled for the benefit of exemption notifications. According to the importers, "printed circuits boards" includes those which have an aluminium base and, therefore, they are entitled to the benefit of notifications. According to the Revenue, "copper clad laminates with an aluminium base" are not covered by the exemption notification and the final products, which were printed circuits boards with an aluminium base are also not included in the expression printed circuits boards. Extract of the relevant exemption notifications is as follows :- Notification ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s boards. These, however, also had an aluminium layer at the bottom which helps in dissipation of heat. According to the Revenue, the additional layer of aluminium at the bottom of the imported laminates makes them different from laminates for PCBs. According to the Revenue, the final products are also not PCBs, but aluminium clad PCBs. According to the importers, they are PCBs and additional layer of aluminium at the bottom to dissipate heat does not make them different and the aluminium clad PCBs are only a subset of PCBs. According to the importers, the imported goods are copper clad laminates and the mere fact that there was also an aluminium layer at bottom will make no difference. Submissions on behalf of Vintek 4. Shri Alok Agarwal and Shri Prachit Mahajan, learned counsels for Vintek made the following submissions: (i) The impugned order passed on 13 October 2023, deciding the proposals made in the show cause notice dated 5 July 2022 is void ab initio because it was passed after the period of one year from the show cause notice prescribed under section 28(9) of the Act. Reliance is placed on the judgment of Delhi High Court in Swatch Group India Pvt. Ltd. versus UOI-20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not to the assessee. (v) The appellant imported aluminium based copper clad laminates, and manufactured MCPCBs and wrongly, claimed the benefit available for manufacture of PCBs. Therefore, invocation of extended period of limitation under section 28(4) to recover differential duty is correct. (vi) The order of the Tribunal in the case of Crompton Greaves was on the question of classification and not on the eligibility of the notification in dispute. (vii) The appeal filed by Vintek may be dismissed and the impugned order may be upheld. 6. Revenue's submissions in it's Customs Appeals No. 55355 of 2023, 55370 of 2023 and 55372 of 2023 (i) In all these three appeals, the Joint Commissioner of Customs (Preventive) denied concessional rate of duty under Notification No. 25/1999-Cus on Aluminium based Copper Clad Aluminium and confirmed demands with interest and penalties. (ii) The Commissioner (Appeals) set aside the order of the Joint Commissioner holding that the importers were eligible for the benefit of the notification. (iii) The Committee of Chief Commissioners reviewed the order of the Commissioner (Appeals) and as per it's directions, these three appeals were fil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... even before the amendment. Findings 8. We have considered the submissions on both sides in these appeals and perused the records. The following issues need to be decided by us in these appeals: a) Are Metal core printed circuit boards (MCPCBs) also printed circuit boards (PCBs) or are they different from them? b) Was the benefit of the exemption Notification No. 25/1999-Cus (S.No. 122) before it's amendment on 2.2.2022 available to the aluminium based copper clad laminates which were imported? c) In the case of Vintek, when in respect of 29 of the 80 Bills of Entry were already decided by the jurisdictional Commissioner in favour of the importer by order dated 13.10.2023 and further when such decision was not even assailed by the Revenue, could the Commissioner of Customs (Preventive) pass a contrary order confirming the demand in respect of 80 Bills of Entry, including the 29 in respect of which an order was already passed? 9. The first issue to be decided is if the MCPCBs are PCBs or they are distinct from them. It would be profitable to examine what are PCBs in the first place. To manufacture any electronic good, various components have to be assembled as per the partic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted circuit boards. Aluminium based copper clad laminates were specifically included in the exemption with effect from 2.2.2022. The disputes in these appeals pertain to a period before the amendment. 13. The case of the Revenue is that MCPCBs are not PCBs and since the description of the goods in the notification before amendment was "Composite copper clad materials consisting of paper + Epoxy + Glass cloth", the imported goods which have, in addition, an aluminium core, were not covered by the notification. 14. Insofar as the question whether MCPCB is also a PCB is concerned, we find that Metal core printed circuit board performs the same function as the printed circuit board and is manufactured using the same method but has an additional functionality of dissipating heat quickly which is required in certain applications. Merely because a good has some additional functionality, it does not cease to be the good. A car, for instance, will NOT cease to be a car simply because it has power steering or power break or auto-transmission, advanced navigation or entertainment systems. The car does not cease to be the car because of these additional features and functions. 15. In Crompt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Customs Tariff. Since the goods in question are composite materials, applying the General Rules of Interpretation, they could fall under any of the Chapters depending upon the composition and essential character of the goods. Chapter 39 covers goods of plastic, Chapter 74 covers goods of copper, Chapter 75 covers goods of nickel, and Chapter 76 covers goods of aluminium. The goods covered by S.No. 122 of the notification can fall under any of these Chapters. Therefore, it cannot be said that goods which also have aluminium core are not covered by the notification when clearly goods which are classifiable under Chapter 76 are also covered by the notification. For instance, if there is metal core laminate with large amount of aluminium by weight and if it is classified accordingly as an article of aluminium, the goods are still entitled to exemption under S.No. 122. 20. There is no manner of doubt that metal core laminates meant to make metal core printed circuit boards were clearly covered by the unamended S.No. 122 of the notification. The importers were entitled to the benefit of the notification. 21. Insofar as Customs Appeal no. 50030 of 2024 filed by Vintek is concerned, in r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urisdictional fact which would exclude the jurisdiction of other proper officers empowered under section 28. (c) Canon India (supra) proceeded on an erroneous assumption that the jurisdiction of the proper officer under Sections 17 and 28 is linked. This is due to the erroneous understanding of the provisions of Act, 1962 that functions under Section 28 involve re-assessment. (d) Therefore, the very basis of the determination of jurisdictional fact for exercise of functions under Section 28 has been clarified by us. Thus, we are of the considered view that the challenge to Section 97, on the ground of inability of a validating Act to overrule a finding of fact, is unfounded and liable to be dismissed. 23. As discussed above, the functions of assessment and re-assessment under Section 17 and the recovery of duty under Section 28 are distinct. Therefore, the exercise of functions under Section 17 can only act as a "jurisdictional fact" for the purpose of excluding the jurisdiction of other proper officers empowered under that section for the exercise of the rest of the functions specified therein. Similarly, the exercise of the function of issuing show cause notices under Sectio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ompton Greaves and upheld by the Supreme Court. b) S.No. 122 of Notification No. 25/1999- Cus before amendment dated 2.2.2022 covered Composite copper clad materials consisting of paper + epoxy + glass cloth which may fall under Chapters 39,74,75 and 76 which clearly shows that the exemption also covered materials which are predominantly copper falling under Chapter 74, which are predominantly nickel falling under Chapter 75 and which are predominantly aluminium falling under Chapter 76. Therefore, it is not correct to say that laminates with metal core used to manufacture MCPCBs were not covered by S.No. 122 of the exemption. The importers were entitled to the benefit of the exemption notification. c) Insofar as the 29 overlapping Bills of Entry are concerned, the SCN dated 30.6.2022 issued demanding duty under section 28 by the Principal Commissioner of Customs (Preventive) is without jurisdiction because other proper officers viz., the Additional Commissioner of Customs (Preventive) and the Deputy Commissioner of Customs (Group IV) had already exercised jurisdiction under section 28 by issuing SCNs dated 4.6.2021 and 29.6.2021 respectively. This exercise of jurisdiction by t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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