2025 (1) TMI 269 - AT - Customs

Classification of imported goods - Metal Core Printed Circuit Boards (MCPCBs) - whether these MCPCBs should be classified under Customs Tariff Heading (CTH) 85340000 as standard Printed Circuit Boards (PCBs) or under CTH 94054090 as parts of LED lamps, which carry different duty implications? - HELD THAT - Department has relied heavily on the IGST Notification 1/2007-I.T(rate) dated 28.06.2017 to decide the classification of the MCPCB cannot be accepted as the same was for the specific purpose of inter-State supply of goods. This cannot supplant the responsibility of the assessing officer under Section 12 of the Customs Act, 1962 to determine the classification of goods. The issue arising out of the present dispute is no more res integra in view of various orders passed by this Tribunal on identical set of facts. Since the Tribunal has taken the view that the product in question i.e., MCPCB should be classifiable under Tariff Item 8534 0000, different view cannot be taken to sustain classification of the same goods under Tariff Item 9405 9900, as claimed by the Revenue. Conclusion - MCPCBs should be classified under CTH 8534. There are no merits in the impugned appeal - appeal dismissed.

1. ISSUES PRESENTED and CONSIDERED

The core legal question in this case is the correct classification of Metal Core Printed Circuit Boards (MCPCBs) imported by the Respondent under the Customs Tariff Act, 1975. Specifically, the issue is whether these MCPCBs should be classified under Customs Tariff Heading (CTH) 85340000 as standard Printed Circuit Boards (PCBs) or under CTH 94054090 as parts of LED lamps, which carry different duty implications.

2. ISSUE-WISE DETAILED ANALYSIS

Relevant Legal Framework and Precedents:

The classification of goods under the Customs Tariff Act is guided by the Harmonized System of Nomenclature (HSN) and relevant notifications issued by the Central Board of Indirect Taxes and Customs (CBIC). The pertinent notifications in this case include Notification No. 24/2005 and Notification No. 1/2017-Central Tax (Rate), which provide guidance on the classification of electronic components and lighting fixtures.

Court's Interpretation and Reasoning:

The Tribunal considered the nature and use of MCPCBs, noting their distinct characteristics from standard PCBs. The primary distinction lies in their metal base, which is designed for heat dissipation, making them suitable for use in LED lights. Despite the Department's argument that MCPCBs should be classified under CTH 9405 as parts of LED lamps, the Tribunal emphasized the necessity of adhering to established precedents that classify MCPCBs under CTH 8534.

Key Evidence and Findings:

The Tribunal reviewed previous orders and decisions, including those in the cases of Crompton Greaves Consumer Electricals Ltd and Halonix Technologies Pvt Ltd, which consistently classified MCPCBs under CTH 8534. These precedents were pivotal in the Tribunal's decision-making process, reinforcing the classification of MCPCBs as standard PCBs.

Application of Law to Facts:

The Tribunal applied the principles of classification under the Customs Tariff Act, considering the intrinsic nature and technical specifications of MCPCBs. The Tribunal found that the characteristics of MCPCBs align more closely with those of PCBs, as defined under CTH 8534, rather than parts of LED lamps under CTH 9405.

Treatment of Competing Arguments:

The Department argued for classification under CTH 9405, citing the specific use of MCPCBs in LED lamps and relevant notifications. However, the Tribunal noted that the notifications cited by the Department pertained to inter-State supply of goods and did not override the classification responsibilities under the Customs Act. The Tribunal also highlighted the lack of substantial reasoning from the appellate authority to support the Department's classification.

Conclusions:

The Tribunal concluded that the classification of MCPCBs under CTH 8534 is consistent with established legal precedents and the technical characteristics of the goods. Consequently, the appeal by the Department was dismissed, and the order-in-appeal dated 13.05.2022 was restored, affirming the classification under CTH 8534.

3. SIGNIFICANT HOLDINGS

Preserve Verbatim Quotes of Crucial Legal Reasoning:

"The issue arising out of the present dispute is no more res integra in view of various orders passed by this Tribunal on identical set of facts."

Core Principles Established:

The Tribunal reaffirmed the principle that classification of goods under the Customs Tariff Act must be based on the intrinsic nature and technical specifications of the goods, supported by established legal precedents. Notifications related to inter-State supply cannot supplant the classification responsibilities under the Customs Act.

Final Determinations on Each Issue:

The Tribunal determined that MCPCBs should be classified under CTH 8534, consistent with prior decisions and the technical characteristics of the goods. The appeal by the Department was dismissed, and the order-in-appeal was restored.

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