2015 (5) TMI 241 - SC - Customs

Classification of goods - LIQUID CRYSTAL DEVICES (LCD) - Classification under Chapter Heading 9013.80 or under Chapter Heading 9028.90 - Held 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. - 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. In accordance with Chapter Note 5, measuring or checking optical appliances, instruments and machines are excluded from this heading and fall in heading 90.31. Chapter Note 4, however, classifies certain refracting telescopes in this heading and not in heading 90.05. It should, moreover, be noted that optical instruments and appliances can fall not only in headings 90.01 to 90.12 but also in other headings of this Chapter (in particular, heading 90.15, 90.18 or 90.27). - LCD would be covered by other devices mentioned in 9013.80 - Decided in favour of assessee.

Issues Involved:
1. Classification of Liquid Crystal Displays (LCDs) for customs duty purposes.
2. Application of Chapter Notes and General Rules for Interpretation.
3. Determination of specific versus general tariff headings.
4. Applicability of Note 2(a) and Note 2(b) of Chapter 90.
5. Relevance of Explanatory Notes by World Customs Organization.

Issue-wise Detailed Analysis:

1. Classification of Liquid Crystal Displays (LCDs) for customs duty purposes:
The primary issue in this case is whether the imported LCDs should be classified under Chapter Heading 9013.80, attracting a Nil rate of basic customs duty, or under Heading 9028.90 as parts of electricity meters. The appellant claimed that LCDs should be classified under Heading 9013.80 based on Notification No. 16/2000, while the respondent argued that they should be classified under Heading 9028.90 as they were part of energy meters.

2. Application of Chapter Notes and General Rules for Interpretation:
The Deputy Commissioner, Customs, classified the LCDs under Chapter Heading 9028.90 by applying Rule 3(c) of the General Rules for Interpretation, which states that goods should be classified under the heading that occurs last in numerical order among those which equally merit consideration. The appellant argued that Note 2(a) of Chapter 90 should apply, which requires parts and accessories included in any headings of Chapter 90 to be classified in their respective headings.

3. Determination of specific versus general tariff headings:
The court examined whether the specific description of LCDs under Heading 9013.80 should prevail over their use as parts of electricity meters under Heading 9028.90. The appellant contended that a specific description should take precedence over a general description, as per Rule 3(a) of the General Rules for Interpretation.

4. Applicability of Note 2(a) and Note 2(b) of Chapter 90:
The court considered Note 2(a) and Note 2(b) of Chapter 90. Note 2(a) states that parts and accessories included in any headings of Chapter 90 should be classified in their respective headings. Note 2(b) applies to parts and accessories suitable for use solely or principally with a particular kind of machine. The court concluded that Note 2(a) was applicable since LCDs are specifically mentioned in Heading 9013.80.

5. Relevance of Explanatory Notes by World Customs Organization:
The court referred to the Explanatory Notes issued by the World Customs Organization, which clarified that LCDs not constituting articles provided for more specifically in other headings should be classified under Heading 9013.80. The court found this to support the appellant's case.

Conclusion:
The court allowed the appeal, set aside the orders of the authorities below, and held that the LCDs imported by the appellant were classifiable under Chapter Heading 9013.80. The court emphasized that specific descriptions in tariff headings should take precedence and that Note 2(a) of Chapter 90 was applicable, leading to the classification of LCDs under Heading 9013.80.

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