2019 (1) TMI 705 - AT - Central Excise

Classification of goods - Manufacture of power bank/ portable mobile charger out of imported components - concessional rate of duty under the Notification No. 12/2012/ Customs dated 13/03/2012, as amended - Held that - From the perusal of the Bill of Entry, it is found that the Customs has classified the power bank under Heading No 8504 40 30. This Customs classification for the product is also based on the HSN commodity description as in the case of Central Excise Tariff. We, therefore, find that the uniformity in the classification has to be maintained by the Revenue appellant. It cannot be a case of Revenue that for the Customs classification under the Customs Tariff Act, 1975, and Central Excise Tariff, 1986, there can be two classifications for the same product on the ground that both the Customs and Excise Tariff are aligned to the HSN Classification of the goods. In this case although the Ministry has issued the clarification to the Respondent regarding the classification of power bank as the accumulator but the same cannot be treated as a circular issued by the Board was as to make it mandatory on the part of the Adjudicating Authority to follow the same. Once it is held that power bank is also a kind of mobile charger, automatically the benefit of the Notification is above will be available to the respondent. It is on record that in this case the goods imported are part and input of power bank (portable mobile battery charger and is entailed for the purpose of use in same, the benefit cannot be denied). The respondent is entitled for the benefit of Notification mentioned as above and has held by the Commissioner (Appeal) in this case - appeal dismissed - decided against Revenue.

Summary

Issues Involved:
1. Classification of the product 'power bank' under the Customs Tariff Act.
2. Eligibility for duty exemption under Notification No. 12/2012-Cus dated 17/03/2012.
3. Applicability of Ministry's clarification on classification and exemption eligibility.
4. Admissibility of the clarification issued by CBEC to the Adjudicating Authority.
5. Comparison of 'power bank' with 'accumulator' and 'mobile battery charger'.

Detailed Analysis:

1. Classification of the Product 'Power Bank':
The primary issue was whether the 'power bank' should be classified under Tariff Heading 8504 40 30 as a mobile battery charger or under Heading 8507 as an accumulator. The respondent argued that the power bank functions as a mobile battery charger and should be classified under Heading 8504 40 30, which aligns with the classification in the Customs Tariff Act. The Tribunal found that the Customs classification based on the HSN commodity description should be consistent with the Central Excise Tariff, supporting the classification under Heading 8504 40 30.

2. Eligibility for Duty Exemption:
The respondent claimed eligibility for duty exemption under Notification No. 12/2012-Cus, which exempts parts or components used in the manufacture of battery chargers for mobile handsets. The Commissioner (Appeal) concluded that the power bank functions similarly to a mobile battery charger, thus qualifying for the exemption. The Tribunal upheld this view, noting that the power bank's primary function is to charge mobile batteries, fulfilling the conditions for the exemption.

3. Applicability of Ministry's Clarification:
The Ministry's letter dated 26/04/2017 clarified that power banks are classified as accumulators under Heading 8507 and are not eligible for the exemption. The respondent argued that this clarification should not influence the Adjudicating Authority's decision. The Tribunal agreed, stating that the clarification was not binding on the Adjudicating Authority and should not override the merits of the case.

4. Admissibility of CBEC's Clarification:
The Tribunal referred to previous judgments (Punjab Recorders Ltd. vs. CCE and Orient Paper Mills Ltd. vs. Union of India) to support the view that CBEC's clarifications are not binding on the Adjudicating Authority. The Tribunal emphasized that the Adjudicating Authority must independently assess the case based on the evidence presented, rather than relying solely on administrative clarifications.

5. Comparison with 'Accumulator' and 'Mobile Battery Charger':
The Tribunal analyzed the functions of a power bank compared to a simple mobile battery charger and an accumulator. It concluded that a power bank performs the primary function of charging mobile batteries, similar to a mobile battery charger, and has additional advantages such as auto-turning off when the battery is fully charged. The Tribunal rejected the classification of the power bank as an accumulator, as it primarily serves as a mobile battery charger without requiring a separate charger.

Conclusion:
The Tribunal upheld the Commissioner (Appeal)'s order, affirming that the power bank should be classified under Heading 8504 40 30 and is eligible for the duty exemption under Notification No. 12/2012-Cus. The appeal filed by the Revenue was dismissed, and the respondent was granted the benefit of the exemption.