2022 (12) TMI 1475 - AAR - Customs

Classification of goods sought to be imported - display assembly/module - to be classified under heading 8524 or not - Sub-section (b) of section 28E of the Customs Act 1962 - HELD THAT - The applicant has stated that display assembly main structure consist of cover glass contrast enhancement film flexible printed circuit integrated circuit on TFT glass and back light unit. It is relevant to mention that in para 4.1 of CBIC Circular No. 14/2022-Customs dated 18-8-2022 Meity has been quoted stating that what are the constituents of the display assembly. Comparing the list of items mentioned in the circular with that of items declared to be part of display assembly imported by the applicant it is found that these items are mentioned at serial no. b c h and j of the list given in para 4.1 of the above circular. It is also clarified that display unit is not equipped with components for converting video signals decoder IC scaler IC and any application processor. On going through the possible headings viz 8517 8524 etc. and GRI and HSN Explanatory Notes thereof. It is also noticed that for the purposes of heading 8524 the declaration of the applicant satisfy conditions of Chapter Note 7 of Chapter 85 thereby Display assembly/module as described in the application for advance ruling merit classification under Sub-heading 8524 91 00.

Summary

Issues:
Classification of goods under the Customs Tariff Act, 1975 - Whether display assembly for cellular mobile phones falls under HS code 8517 79 90 or 8524?

Analysis:
1. The applicant sought an advance ruling on the classification of goods under the Customs Tariff Act, specifically regarding the manufacturing of display/assembly for cellular mobile phones. The applicant imported parts such as FOG-semi display unit, backlight unit, and cover glass for manufacturing the display assembly and wanted to determine whether the finished display or parts of the display would fall under HS code 8517 79 90 or 8524.

2. The concerned Principal Commissioner highlighted the importance of determining the classification of the complete display before deciding on the classification of its parts. The classification of goods under the Customs Tariff Act is governed by the General Rules for Interpretation (GRI), which prioritize specific descriptions over general descriptions. Chapter Note 7 of Chapter 85 specified criteria for flat panel display modules, emphasizing the incorporation of display screens into articles of other headings. The classification decision hinged on whether the display modules included components for converting video signals.

3. During the hearings, the applicant provided information on the items imported to manufacture the display assembly and confirmed regular imports of parts classified under heading 8517. The Authority requested additional documentation, including local sale invoices and clarification on the presence of video signal conversion components. The Directorate of Revenue Intelligence informed that the ruling application was not part of their ongoing investigation against the applicant.

4. Subsequently, the applicant submitted local sale invoices and import Bill of Entry copies, affirming the classification of items under different sub-headings. The applicant clarified that the display unit lacked components for converting video signals. The concerned Principal Commissioner opined that based on the additional submissions, the display and its parts should be classified under 8524 and 8529, respectively.

5. The Authority, after verifying the validity of the application and considering the importance of timely rulings, proceeded to examine the classification question. Given the regular importation of parts by the applicant, the Authority decided to rule only on the classification of the display assembly/module. Comparing the components of the display assembly with relevant circulars and classification headings, the Authority concluded that the display assembly should be classified under Sub-heading 8524 91 00.

6. In conclusion, the Authority ruled in favor of classifying the display assembly/module under Sub-heading 8524 91 00 based on the provided information and relevant legal provisions.