2024 (4) TMI 729 - AT - Customs

Benefit of exemption from Customs Duty - Validity Of Original re-assessment orders - Modification of self assessment made by the appellant claiming the benefit of exemption under Sl. No. 29 and 30 of Notification No.24/2005-Customs as amended - Classification of impugned goods viz. Open Cells under CTH 85.24 and in classification of associated parts of Open Cells under CTH 85.29 - whether the imported goods is the Liquid Crystal Device or not - HELD THAT - On careful reading of the impugned order passed by the learned Commissioner of Customs (Appeals) it transpires that he has given a specific finding that there is no dispute in the classification of impugned goods viz. Open Cells under CTH 85.24 and in classification of associated parts of Open Cells under CTH 85.29. Further he had stated that the issue in contention is whether exemption under Serial No. 29 30 of Notification No.24/2005-Customs dated 01.03.2005 is applicable to the impugned goods or not. In answering to the issue in dispute learned Commissioner of Customs (Appeals) had concluded that Open Cell cannot be considered as the Liquid Crystal Display (LCD) itself as certain other components have to be attached to convert it into a fully functional LCD. We also find that such an examination has not been carried out. This is for the reason that firstly the description of the goods specified in the exemption entry at Sl. No. 39 viz. Liquid Crystal Devices has not been explained to state whether the imported goods is the Liquid Crystal Device or not. Instead it has been simply stated that the imported goods are not a fully functional Liquid Crystal Display as open cell needs to be added with certain other components to make it so. Even the original authority did not examine these aspects despite the claim made by the appellants that Open Cell is a Liquid Crystal Device in terms of HSN Explanatory note to the heading 8524. The facts of the case further indicate that in the Original order dated 17.11.2022 customs duty exemption benefits under Sl. No.515A and 516 of Notification No.50/2017-Customs dated 30.06.2017 have been extended whereas in the Original order dated 29.11.2022 merit rate of duty has been applied without extending any duty exemption benefit while reassessing the B/Es u/s 17(5) ibid in contrary to the declaration made for self assessment of goods by the appellants u/s 17(1) ibid. In this context the learned Commissioner of Customs (Appeals) has not examined in detail how the exemption was allowed for imported goods under one B/E and in other B/E the same was rejected without verifying the fulfillment of the exemption entries under Sl. No.515A and 516 of Notification No.50/2017-Customs dated 30.06.2017 which are subject to certain conditions under Customs (Import of Goods at Concessional Rate of Duty) Rules 2017 and upheld this contradictory original orders in the same Order-in-Appeal i.e. impugned order dated 21.02.2023. Thus in our considered view is a clear case of non-application of the mind and thus the impugned order dated 21.02.2023 is liable to be set aside on these grounds alone. From the arguments advanced by the Advocates for the appellants explaining in detail the relevant customs tariff entries and the Chapter 85 and 90 introduction of Chapter Note 7 chapter 85 and the explanation for the insertion of new CTH 85.24 and the entries therein legislative history of open cell technical literature and explanation in the form of an affidavit duly notarized stating that open cell are used for Television or monitor or display screen application and the various process involved in manufacture of such articles concluding that open cell and panel are both LCD devices; various decisions of the Tribunal and the judgements of the Hon ble Supreme Court relied upon by them there is legal force in the argument that the exemption benefit under Sr. No.29 30 of the Notification No.24/05-Cus. dated 01.03.2005 should be extended to the impugned goods. We are also of the considered view that the authorities below in reassessment of impugned goods u/s 17(5) ibid are required to pass a reasonable order which is of a speaking nature conforming to the requirements of the definition of assessment which include such reassessment . Hence it is imperative that amongst other issues tariff classification of imported goods and exemption or concession of duty issued under notifications issued under Section 25 ibid are required to be examined and determined in order to fulfill the requirements of reassessment in terms of Section 2(2) ibid. We are of the considered view that the impugned order passed by the learned Commissioner (Appeals) cannot be sustained on merits. However we are also of the considered view that in order to examine the various issues of reassessment of impugned goods covered under the two Bills of Entry (B/E) No. 9574139 dated 16.07.2022 and B/E No.2453614 dated 15.09.2022 for deciding upon the eligibility to Customs duty exemption benefits under Sl. No. 29 and 30 of Notification No.24/2005-Customs dated 01.03.2005 as amended the matter needs to be decided afresh in de novo proceedings by the original authority. Therefore the impugned orders are set aside and the appeals are allowed in favour of the appellants by remanding the matter for a fresh decision by Original Authority after duly taking into consideration the various submissions made by the appellants and the points advanced by Revenue in these appeals before the Tribunal. In the result the appeals are allowed by way of remand for fresh de novo proceedings in the above terms.

Summary

Issues Involved:

1. Eligibility of goods imported under two Bills of Entry for availing Customs duty exemption u/s Sl. No. 29 and 30 of Notification No.24/2005-Customs dated 01.03.2005.
2. Consideration of additional grounds omitted by the appellants due to inadvertent error.
3. Re-assessment of imported goods by the Department and the subsequent appeals filed by the appellants.

Summary:

1. Eligibility of Goods for Customs Duty Exemption:

The primary issue was whether the goods imported by the appellants under Bills of Entry No. 9574139 dated 16.07.2022 and B/E No.2453614 dated 15.09.2022 were eligible for Customs duty exemption under Sl. No. 29 and 30 of Notification No.24/2005-Customs dated 01.03.2005. The appellants classified the imported 'Open cells' under CTH 85.24 and associated parts under CTH 85.29, claiming exemption benefits. The Department disputed this classification and re-assessed the goods under different notification entries, denying the claimed exemptions. The Tribunal found that the Commissioner of Customs (Appeals) did not adequately examine whether the imported goods qualified as 'Liquid Crystal Devices' or 'parts thereof' under the said notification. The Tribunal emphasized the need for a detailed examination of the technical and legal aspects, including the HSN explanatory notes and the legislative history of the tariff entries.

2. Consideration of Additional Grounds:

The appellants filed Miscellaneous Applications to incorporate additional grounds that were omitted due to an inadvertent error. The Tribunal accepted these applications, noting that the additional grounds were justified and should be considered as part of the appeal memorandum. The Tribunal decided to hear these applications along with the main appeals and disposed of them on these terms.

3. Re-assessment and Appeals:

The Department re-assessed the imported goods, denying the claimed exemptions and applying different notification entries. The Original orders were upheld by the Commissioner of Customs (Appeals), leading the appellants to file appeals before the Tribunal. The Tribunal found that the Commissioner of Customs (Appeals) failed to provide a reasoned order and did not consider the detailed submissions made by the appellants. The Tribunal highlighted the necessity of a speaking order and adherence to judicial discipline, citing the Supreme Court's judgment in Union of India Vs. Kamlakshi Finance Corporation Ltd., 1991 (55) E.L.T. 433 (S.C). The Tribunal set aside the impugned orders and remanded the matter back to the original authority for a fresh decision, directing a thorough examination of the technical and legal aspects and providing the appellants with an opportunity for a personal hearing.

Conclusion:

The appeals were allowed by way of remand for fresh de novo proceedings, with the original authority directed to re-assess the goods and consider the various submissions made by the appellants, ensuring a reasoned and detailed order.