2016 (9) TMI 469 - AT - Customs

Classification of imported goods clearance of Liquid Crystal Display for energy meters i.e. LCDs - Customs Tariff Heading 90138010 or CTH 90289010 as parts of energy meters exemption from BCD under notification 24/2005-Cus Sr. No. 29 - Held that - the decision has been taken based on the case Secure Meters Ltd Vs. Commissioner of Customs, New Delhi 2004 (4) TMI 108 - CESTAT, NEW DELHI . It was held that the correct classification is under Customs Tariff Heading 90138010. Thus, benefit of exemption from BCD available appeal allowed decided in favor of appellant.

Summary

Issues:
Classification of imported goods under Customs Tariff Heading, Exemption from BCD, Interpretation of Chapter note and Rule of Import Tariff.

Analysis:
The appeal challenged the Order-in-Appeal passed by the Commissioner of Customs(Appeals), Mumbai-III, upholding the classification of imported 'Liquid Crystal Display' (LCDs) under CTH 90289010 as parts of 'energy meters' instead of under CTH 90138010 for energy meters, claiming exemption from BCD under notification 24/2005-Cus Sr. No. 29. The appellant relied on a recent Supreme Court judgment in M/s. Secure Meters Ltd. Vs. Commissioner of Customs, New Delhi[2015-TIOL-100-SC-CUS], which held that LCDs imported for manufacturing electricity meters are not excluded by Heading 90.13 of the Tariff and are correctly classifiable under Heading 90.13 of the Tariff as 'parts and accessories.' The Adjudicating authority had based its decision on a Tribunal judgment in the case of Secure Meters Ltd Vs. Commissioner of Customs, New Delhi [2004(168) ELT 63(Tribunal Delhi)], which was later reversed by the Supreme Court.

The Hon'ble Apex Court analyzed the nature of the product, LCDs, and the relevant tariff entries. It emphasized that LCDs imported by the appellant did not constitute any specific 'article' under other headings and should be classified under Heading 9013. The Court highlighted the importance of Chapter Note 2(a) in classifying goods used as parts in the final product mentioned in Chapter 90. The Court rejected the argument that LCDs should be classified under Entry 9028.90.10 as 'parts and accessories' solely for electricity supply meters, as it found Note 2(b) inapplicable when Note 2(a) squarely applied. The Court referred to Collector of Central Excise v. Delton Cables Ltd. & Anr. (2005) 12 SCC 284 to support its interpretation of Chapter Notes.

The Court further referenced the Part-III of Chapter Notes to Chapter 90, which provides guidelines on classifying parts and accessories with machines or apparatus. It clarified that LCDs should be classified under Heading 9013.80 as 'other devices' based on the World Customs Organization's Explanatory Notes. The Court concluded that the Tribunal's judgment was unsustainable in law and allowed the appeal, setting aside the lower authorities' orders and holding that the LCDs imported by the appellant were correctly classifiable under Chapter Heading 9013.80. The impugned order was deemed not sustainable in law, leading to the allowance of the appellant's appeal.