Custom, Excise & Service Tax Tribunal
M/S Samsung India Electronics Pvt. Ltd vs Cc, Noida on 10 June, 2015
IN THE CUSTOMS, EXCISE & SERVICE TAX
APPELLATE TRIBUNAL
West Block No. 2, R.K. Puram, New Delhi 110 066.
Date of Hearing/Order : 10.6.2015
No. C/710-726/2009, C/532-534/2010 & C/116/2012
(Arising out Order-in-Appeal No. 255 to 271/CE/APPL/NOIDA/09 dated 18.9.2009, 177-179-CUS-APPL/NOIDA/2010 dated 25.6.2010 & 07-CUS-APPL-NOIDA-2012 dated 10.1.2012 passed by the Commissioner of Customs (Appeals), Noida)
For Approval & Signature :
Honble Mr. Justice G. Raghuram, President
Honble Mr. R.K. Singh, Member (Technical)
1.
Whether Press Reporter may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?
2.
Whether it would be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?
3.
Whether their Lordships wish to see the fair copy of the order?
4.
Whether order is to be circulated to the Department Authorities?
M/s Samsung India Electronics Pvt. Ltd. Appellant
M/s Moser Bear (I) Ltd.
Vs.
CC, Noida Respondent
Appearance:
Shri S. Vasudevan, Advocate - for the Appellant
Ms. Disha Jain, Advocate
Shri Rajiv Tandan, D.R. - for the Respondent
Shri Amresh Jain, D.R.
Coram : Honble Mr. Justice G. Raghuram, President
Honble Mr. R.K. Singh, Member (Technical)
F. Order No. 52760-52780/2015
Per R.K. Singh:
The only issue in these appeals is the classification of Liquid Crystal Devices (LCDs) imported by the appellants. While the appellants sought classification of LCD under Heading 90138010, the Revenue classified them under CTH 852990.90 on the ground that these are parts suitable for use solely or principally with LCD TV of CTH 8528.
2. The ld. Advocate for the appellant contended that :
(i) LCD are specifically covered under CTH 901380 and it cannot be said that CTH 8529 covers them more specifically as 8529 did not mention them by name and contained a general description.
(ii) As per Note 1 (m) to Section XVI of Customs Tariff Schedule this section does not cover articles of Chapter 90 and therefore LCDs are outside the scope of this Section which covers Chapter 84 and 85 only.
(iii) In the case of Videocon Industries Ltd. Vs. CCE 2009 (92) RLT 383 - LCDs have been classified under CTH 9013 and not under CTH 8529.
(iv) The adjudicating authority in the impugned order relied upon the judgement of CESTAT in the case of M/s Secure Meters Ltd. Vs. CC, New Delhi 2004 (169) ELT 63 (Tri.-Del.) but that decision of CESTAT has since been altered by Supreme Court vide order dated 5.5.2015 in Civil Appeal No. 7526 of 2004 by holding the LCDs for energy meters to be classifiable under CTH 9013.
(v) The reliance by Revenue on Regulation (EU) No. 1202/2011 of 18 November 2011 of the European Union is misplaced because their description of sub-heading CTH 8529 90 is not the same as the description under CTH 8529 90 in Indian Customs Tariff Schedule
4. Per contra, Revenue has contended that :
(a) CTH 9013 specifically excludes LCDs which constitute articles provided for more specifically in other headings and as these LCDs are without any doubt parts of LCD televisions, they are more specifically covered under 85.29.
(b) The Supreme Court judgement in the case of Secure Meters Ltd. (supra) is not directly applicable to these cases because in that case the dispute was classification of LCDs imported for manufacture of energy meters which were themselves covered under the same chapter (Chapter 90) and therefore attracted Note 2 to Chapter 90 for the purpose of classification while in the present case, Note 2 of Section XVI of the Customs Tariff gets attracted.
(c) The identical goods have held to be classifiable under 8529 by European Union.
(d) The Videocon judgement cited by the appellant is not applicable as in that case the goods were liquid crystal panels while the goods involved in these appeals are merely LC panels but LC panels attached with driver, circuit, backlight unit, circuitry PCB and inverter etc. all in a metal casing and thus the goods are not merely LC panels but LCD modules which constitute articles provided for more specifically under CTH 8529 as the parts suitable for use solely or principally with LC television.
5. We have considered the contentions of both sides. It is a fact that goods imported are not merely liquid crystal panels but articles comprising liquid crystal panel, driver, circuit, backlight unit, circuitry PCB and inverter etc. all in a metal casing. The Revenue calls these articles LCD modules. Therefore there is force in the contention of Revenue that the judgement in the case of Videocon Industries Ltd. (supra), cited by the appellant may not be applicable to the present case as in that case the goods were Liquid Crystal Panels. Nevertheless the first relevant question to answer in this case is whether the goods which the Revenue calls LCD modules are liquid crystal devices (LCDs). According to Google, device means a thing made or adapted for a particular purpose, specially a piece of mechanical or electronic equipment. There is no doubt that the impugned goods (which have liquid crystal panels along with several other components) are made for a particular purpose (for LCD TV) and therefore they are clearly covered under the scope of the expression liquid crystal device (LCD). Indeed even the components of the impugned goods like liquid crystal panel, driver, backlight unit, inverter etc. are nothing but devices in their own right and therefore a combination thereof would also be a device and as the impugned goods have liquid crystal panel as one of the components, the impugned goods are clearly liquid crystal devices (LCDs). That the impugned goods (which Revenue calls LCD modules) are LC devices is not seriously contested by Revenue also and therefore any elaboration on this point is shunned. The only issue which now remains to be decided is whether these LCDs are covered CTH 9013 or 8529. The relevant parts of CTH 9013, 8528 and 8529 are reproduced below for convenience:
Chapter Heading
Photographic, medical, measuring & etc. instruments
9013
Liquid Crystal devices not constituting articles provided for more specifically in other headings; ;lasers, other than laser diode; other optical appliances and instruments, not specified or included elsewhere in this Chapter.
9013.10
-
Telescopic sights for fitting to arms; periscopes; telescopes designed to form parts of machines appliances, instruments or apparatus of this chapter or Section XVI 9013.20.00
-
Lasers, other than laser diodes 9013.80
-
Other devices, appliances and instruments 90138010
-
Liquid Crystal devices (LCD) 9013.80.90
-
Other 8528 Monitors and projectors, not incorporating television reception apparatus; reception apparatus for television, whether or not incorporating radio-broadcast receivers or sound or video recording or reproducing apparatus 8529 Parts suitable for use solely or principally with the apparatus of headings 8525 to 8528 8529.10
-
Aerials and aerial reflectors of all kinds; parts suitable for use therewith 8529.90
-
Other 8529.90.10
-
For communication jamming equipment 8529.90.20
-
For amateur radio communication equipment 8529.90.90
-
Other It is evident that liquid crystal devices (LCDs) are specifically mentioned in CTH 9013. Therefore CTH 9013 would cover them unless it can be demonstrated that they are more specifically provided for in other headings. The Revenues contention is that CTH 85.29 covers them more specifically because the impugned LCDs are parts suitable for use solely or principally with LCD TV which is covered under heading 8528. While there is no doubt that these LCDs are parts suitable for use solely or principally with LCD TVs covered under CTH 8528, it has to be determined whether description of CTH 8529 is more specific vis-a-vis the description in CTH 9013 as far as the coverage of LCDs is concerned. CTH 9013 covers LCDs by name. Indeed its sub-heading 90138010 exclusively covers only liquid crystal devices (LCDs) and nothing else. However, there are liquid crystal devices which are known by specific names, for example, LCD television, energy meters (having LCDs) which, though liquid crystal devices, are more specifically covered under 85.28 and 90.28 respectively and therefore would get out of the scope of CTH 9013. Similarly even a watch can be a liquid crystal device but is classified under CTH 9012 being more specifically covered there. Thus there are indeed a number of liquid crystal devices which are provided for more specifically in other headings and are consequently not covered under CTH 9013. However, as stated earlier, CTH 90.13 covers LCDs by name and CTH 90138010 is exclusively carved for LCDs. In contrast, the description of CTH 85.29, parts suitable for use solely or principally with the apparatus of heading 8525 to 8528 is general in nature. Thus, while LCDs are specifically mentioned in CTH 9013 which has a sub heading exclusively for LCDs only, their coverage under CTH 85.29 can be only on the ground that the general description of CTH 8529 would cover LCDs as parts of LCD TV. It is thus obvious that between CTH 9013 and CTH 8529, the impugned LCDs are far more specifically provided for in CTH 9013 than under in CTH 85.29.
6. The reference to Section Note 2(b) of Section XVI of Customs Tariff Schedule was made by Revenue in support of its contention. That Section Note (2) is reproduced below :
Subject to Note 1 to this Section, Note 1 to Chapter 84 and to Note 1 to Chapter 85, parts of machines (not being parts of the articles of the articles of heading 8484, 8544, 8545, 8546 or 8547) are to be classified according to the following rules :
(a) Parts which are goods included in any of the headings of Chapter 84 or 85 (other than headings 8409, 8448, 8466, 8473, 8487, 8503, 8522, 8529, 8538 and 8548) are in all cases to be classified in their respective headings;
(b) Other parts, if suitable for use solely or principally with a particular kind of machine or with a number of machines of the same heading (including a machine of heading 8479 or 8543) are to be classified with the machines of that kind or in heading 8409, 8431, 8448, 8466, 8473, 8503, 8522, 8529 or 8539 as appropriate. However, parts which are equally suitable for use principally with the goods of headings 8517 and 8525 to 8528 are to be classified in heading 8517;
(c) All other parts are to be classified in heading 8409, 8431, 8448, 8466, 8473, 8503, 8522, 8529 or 8538 as appropriate or, failing that, in heading 8487 or 8548. As is evident from the above quoted Section Note, this note deals with the classification of parts of certain machines but Section XVI covers only Chapters 84 and 85 of Customs Tariff and therefore Section Note 2 to Section XVI would not be applicable to Chapter 90. Consequently when it comes to deciding classification under Chapter 90, this Section Note is of no avail; more so because Note (1) (m) of Section XVI clearly states that Section XVI does not cover articles of Chapter 90. Indeed by virtue of this Section Note [(1(m)] and in view of the fact that, as discussed earlier, the impugned LCDs are more specifically covered under 9013 80 10 vis-a-vis their general coverage under CTH 8529, they would get classified under CTH 9013 rather than CTH 8529.
7. In the case of M/s Secure Meters Ltd. Vs. CC, New Delhi 2015 (319) ELT 565 (SC ), the Supreme Court had an occasion to decide the classification of LCDs which were parts of energy meters. Declaring that those LCDs are covered under CTH 9013, the Supreme Court in paras 15, 16 & 19 observed as under :
15.?Keeping in mind the aforesaid nature of product in question, we revert to the tariff entries. It cannot be disputed that LCDs are specifically provided in Tariff Item 9013. The only condition is that such LCDs should not constitute articles provided more specifically in other headings. In the present case, it is also not in dispute that LCDs imported by the appellant did not constitute any such article which is more specifically provided in other headings. On the contrary, the Revenue wants to include in the same Chapter, i.e., Chapter 90, though under Entry 9028.90.10 as parts and accessories. The only reason for including the goods under Chapter Heading 9028 is that the LCDs were to be used in the electricity supply meters. However, Entry 9028 does not pertain to LCDs but gas, liquid, etc., and includes electricity supply meters as well. Merely because these LCDs are to be used as parts in the said electricity supply meters, can it be said that they are to be included in Entry 9028? Here, Note 2 of this Chapter Notes becomes important since LCDs are used in the electricity supply meters only as parts thereof.
Note 2(a) stipulates that parts and accessories which are goods included in the heading of the said Chapter, i.e., Chapter 90, are to be classified in their respective headings. Going by the plain reading of Note 2(a) it is clear that LCDs, which are goods and are used as parts in the final product mentioned in Chapter 90, namely, electricity supply meters, are to be classified in its respective heading. Respective heading, which is specifically provided, is 9013.
16.?It was sought to be argued by Ms. Kiran Suri that as per Note 2(b), when these LCDs are used solely for particular instrument, namely, electricity supply meter, it has to be classified with the said meter and, therefore, Chapter Entry 9028 would get attracted. However, this argument loses sight of the fact that Note 2(b) relates to other parts and accessories, namely, it would apply to those parts and accessories for which Note 2(a) is inapplicable. Once we find that in the present case Note 2(a) squarely applies, the irresistible conclusion is that the goods will be classified in Tariff Item 9013, which is the specific heading for these goods.
....................
19.?This contains a general explanation to Chapter Note 2 and mentions that where parts or accessories identifiable as suitable for use solely or principally with the machines, appliances, etc., they are to be classified with those machines/appliances. However, what is important is that immediately thereafter it is clarified that this general rule would not apply in certain circumstances. Sub-para of the above takes things beyond the pale of any doubt by making it crystal clear that those parts and accessories which in themselves constitute article falling in any particular heading of this Chapter, the general rule will not apply and said article would fall in that particular heading. To demonstrate this, examples which are given, eminently fit into the case at hand.
The Revenue has tried to distinguish this judgement of Supreme Court by stating that it referred to Note 2(a) of Chapter Note 90 while was applicable in that case as the energy meters also fell under Chapter 90 while in the present case LCD TVs fall under CTH 85.28. For the ease of reference Chapter note 2(a) to Chapter 90 is reproduced below :
2(a) Parts and accessories which are goods included in any of the headings of this chapter or of Chapter 84, 85 or 91 (Other than (other than Heading 8487, 8548 or 9033) are in all cases to be classified in their respective headings.4 Thus parts and accessories which are goods included in any of the heading of this Chapter (i.e. Chapter 90) or Chapter 84, 85 or 91 (other than Heading 8487, 8548 or 9033) are in all cases to be classified in their respective headings. Chapter Note 2(a) also referred to Chapters 84, 85 and 91 apart from Chapter 90. Thus as per this Chapter Note [2(a)], the impugned LCDs being included in CTH 9013 will get classified there and the ratio of the Supreme Courts judgement in the case of Secure Meters (supra) is not distinguishable on the basis of that Chapter Note; indeed, quite to the contrary, it applies mutatis mutandis to the present case. By holding that LCDs suitable for use solely or principally with energy meters are more specifically covered under CTH 9013, the Supreme Court has, in effect, declared that CTH 9013 covers LCDs (for energy meters) more specifically than CTH 90289010 which covers parts and accessories of energy meters. It clearly follows from the said Supreme Court judgement that the description parts suitable for use solely or principally with LCD TV does not cover LCDs for LCD TVs as specifically as the description of CTH 9013 which covers LCDs by name and devotes a sub heading (90138010) exclusively therefor.
8. Revenue also referred to the decision of European Union (supra). Although the decisions of other Customs administrations can be a useful guide, they have no binding effect on India Customs. On the other hand, ratio of Supreme Courts decisions is binding. That apart, it is seen that, for example, U.K Customs description of CTH 8529 is as under:8529
Parts suitable for use solely or principally with the apparatus of heading 8525 to 8528. 8529 10
-
Aerials and aerial reflectors to all kinds; parts suitable for use therewith 8529 90
-
Other 8529 90 90
-
Cabinets and cases Electronics assemblies Other 8529 90 92 15 LCD modules Solely consisting of one or more TFT glass or plastic cells,
-not combined with touch screen facilities,
-with one or more printed circuits boards with control electronics for pixel addressing only,
-with or without backlight unit and
-with or without inverters.
It is evident from the above that in the Customs Tariff of U.K. (which is part of EU) there exist sub-heading 8529909215 specifically covering LCD modules. No such sub-heading of under CTH 8529 (specifically covering LCDs) exists in Indian Customs Tariff.
9. In the light of the analysis above, we hold that the impugned LCDs are classifiable under 90138010 and therefore we allow the appeals.
(Justice G. Raghuram) President (R.K. Singh) Member (Technical) RM 8