2004 (4) TMI 99 - AAR - Customs

Whether the concessional rate of customs duty 5% (now nil) would not be applicable to panel AG Assembly in terms of Sl. No. 110 of the Notification No. 25/99-Cus., dated 28-2-99 as amended?

Summary

Issues:
- Applicability of concessional rate of customs duty on Panel AG Assembly under Notification No. 25/99-Cus.

Analysis:
1. Issue: Applicability of Concessional Rate of Customs Duty
- The applicant sought an advance ruling on whether the concessional rate of customs duty of 5% would apply to the Panel AG Assembly under Sl. No. 110 of Notification No. 25/99-Cus.
- The applicant intended to import parts of cathode ray tubes, including glass and metal components, for manufacturing colored picture tubes based on Trinitron Technology.
- The Revenue opposed the claim, alleging that the assembly of glass and metal parts in PAGA was an attempt to circumvent higher duty on glass parts by claiming a concessional rate for non-glass parts.

2. Analysis of Contention
- The applicant argued that PAGA should be classified under Heading 8540.91 and be eligible for the concessional rate under the notification.
- The history of notifications showed successive decreases in duty rates for glass and non-glass parts, but it did not conclusively support the applicant's claim.
- The HSN Explanatory Note and classification under Chapter 85 were cited to support the argument that PAGA ceased to be a glass part and should be eligible for the concessional rate.

3. Interpretation of Exemption Notification
- The notification exempted non-glass parts of cathode ray tubes from duty, excluding glass parts.
- The ruling clarified that the benefit applied only to individual parts commonly traded in the market, not to assemblies like PAGA that combined glass and non-glass parts.
- An assembly of glass and metal parts could not be considered a part of CRT other than a glass part, as per the strict interpretation of the notification.

4. Conclusion
- The ruling concluded that the concessional rate of customs duty of 5% would not be applicable to Panel AG Assembly under Sl. No. 110 of Notification No. 25/99-Cus., dated 28-2-99 as amended.
- The decision was based on the interpretation that the benefit of the notification applied to individual non-glass parts, not to assemblies combining glass and non-glass components.

This detailed analysis of the legal judgment highlights the issues involved, the arguments presented by the parties, the interpretation of the exemption notification, and the final ruling on the applicability of the concessional rate of customs duty to the Panel AG Assembly.