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TMI Blog2024 (4) TMI 729X X X X Extracts X X X X X X X X Extracts X X X X ..... 9574139 dated 16.07.2022 and B/E No.2453614 dated 15.09.2022 for availing Customs duty exemption under Sl. No. 29 and 30 of Notification No.24/2005-Customs dated 01.03.2005, as amended. 2.2 The appellants have also filed two Miscellaneous Applications No. 85588/2023 and No.85755/2023 in Customs Appeal No.85352 of 2023 and another two Miscellaneous Applications No. 85589/2023 and No.85756/2023 in Customs Appeal No.85353 of 2023, for incorporation of certain additional grounds in their appeal filed before the Tribunal, which got omitted due to their inadvertent error. On careful examination of the applications filed by the appellants for consideration of these additional grounds vis-à-vis the case records, we find that the averments made therein justify the case for consideration of such additional grounds and accordingly, we take up those additional grounds as part and parcel of the appeal memorandum for consideration. In view of the above, the miscellaneous applications are taken up for hearing along with main appeals in the case and for a decision on merits. Accordingly, these miscellaneous applications are disposed of on the above terms. 2.3 The appellants are an Origin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... before the learned Commissioner of Customs (Appeals), which were disposed of vide impugned order dated 21.02.2023 passed by him in upholding the orders passed by the original authority and rejecting the appeals filed by the appellants. Feeling aggrieved with the impugned orders, the appellants have preferred these appeals before the Tribunal. 3.1 Learned Advocate appearing for the Appellants, stated that the impugned goods viz. 'open cell' undisputedly is classifiable under CTH 85.24, and it is not disputed by the Department. In terms of Note 7 to Chapter 85, all articles of 85.24 are treated as 'device' or 'apparatus'. Accordingly, he claimed that open cell will qualify as 'device' and its use as 'liquid crystal display' will qualify as 'liquid crystal device'. In addition to the above, it is also claimed by the appellants that 'open cells' in as-imported condition/ as such can be used for manufacture of monitors falling under sub-headings 8528.42, 8528.52, 8528.62, solely or principally used in automatic data processing system of heading 84.71 and therefore are eligible for exemption under Sl. No. 29 of Notification No.24/05-Customs dated 01.03.2005. Similarly, they claimed tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... denied so long as goods conform to the description mentioned in the notification, learned AR stated that in terms of the judgement in the case of Commissioner of Customs (Import), Mumbai Vs. Dilip Kumar & Company 2018 (361) E.L.T. 577 (S.C.), all the earlier decisions prior to 2010 are not applicable in view of the recent judgement of the Hon'ble Supreme Court. Learned AR submitted that the said decision of the Hon'ble Apex Court, has held that exemption notification should be interpreted strictly; the burden of proving applicability would be on the assessee to show that his case comes within the parameters of the exemption notification; when there is ambiguity in exemption notification which is subject to strict interpretation, the benefit of such ambiguity cannot be claimed by the assessee and it must be interpreted in favour of the revenue. Accordingly, Learned AR submitted that the impugned order of the Commissioner of Customs (Appeals) is legally sustainable. 4. Heard both sides and perused the records of the case. We have also considered the additional written submissions given in the form of paper book by learned Counsel for the appellants as well as Authorised Representat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ad issued the Order-in-Original dated 17.11.2022, in denying the Customs duty exemption claimed by the appellants. The relevant portion of the above Order is extracted and given below: "ORDER 14(i) I reject the declared notification benefit of Notification No. 24/2005- Customs dated 01.03.2005 Sr. No. 29, claimed for item No. 4 in Bill of Entry 9574139 dated 16.07.2022 of M/s. MIRC Electronic Ltd, (IEC No. 0388063394) and order to re-assess the item no. 4 with notification benefit of Sr. No. 515A of Notification 50/2017-Cus. (ii) I reject the declared notification benefit of Notification NO. 24/2005-Customs dated 01.03.2005 Sr. No. 30, claimed for item No. 6, 7, 12, 30 & 44 in Bill of Entry 9574139 dated 16.07.2022 of M/s. MIRC Electronic Ltd, (IEC No. 0388063394) and order to re-assess these items with notification benefit of Sr. No. 516 of Notification 50/2017-Cus. " 6.3 Similarly, imported goods under dispute covered under B/E No. No.2453614 dated 15.09.2022 have been declared as ' Open Cell 42.5" ' under item Sl. No.10 & 24 of invoice No.1 and 23 of invoice No.2 by claiming customs duty exemption under Sl. No. 29 of Notification No.24/2005- Customs dated 01.03.2005, and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and 29.11.2022, the appellant had preferred an appeal before the Commissioner of Customs (Appeals), who on the basis of certain findings had rejected the appeals filed by the appellants by holding that there are no reasons to interfere with the Original Orders and upheld the same. The specific findings given in the impugned order and the conclusion arrived by the learned Commissioner of Customs (Appeals) is extracted and given below: "5.2 During the assessment, the Assessing Officer raised queries with respect to the exemption claimed by the Appellants under Sr. No. 29 and 30 of Notification No. 24/05-Cus., on the ground that imported Open Cell is not an LCD Device. As per the department, Open Cell and its parts are correctly eligible for concessional rate of BCD @ 5%/10% in terms of Sr. No. 515A and 516 of Notification No. 50/17-Cus. dated 30.06.17, and are not eligible for complete exemption from BCD under Notification No. 24/05-Cus., dated 01.03.05 as claimed by the Appellants. 5.3 The original authority rejected the benefit of complete exemption from payment of Basic Customs Duty (BCD) in terms of Sr. No. 29 as claimed with respect to 'Open Cell' & Sr. No. 30 as claimed w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ess, it is clear that the Open Cell is just a part of LCD Panel assembly imported principally for use in manufacturing of LCD/LED television panels. 11. In the instant case, I find that the Notification No. 50/2017-Cus as amended vide Notification No. 32/2018-Customs dated 23.03.2018 (Sr. No. 515A), the item which is eligible for exemption for concessional rate of duty is "Open Cell (15.6" and above) for use in the manufacture of Liquid Crystal Display (LCD) and Light Emitting Diode (LED) TV panels of heading 8529". From this, it is very clear that open cell is a part of LCD/LED TV panel for which the concessional rate of duty has been extended. It is not the case of the appellant that the 'Open Cell' imported by them are not used for manufacture of LCD/LED TV's. 12.1 I observe that the impugned goods "Open Cell" are used in the manufacture of Liquid Crystal Display (LCD) and Light Emitting Diode (LED) TV panels and cannot be considered as the Liquid Crystal Display (LCD) itself as certain other components how to be attached to convert it into a fully functional Liquid Crystal Display (LCD). I find that benefits of Notification No.24/05-Cus., dated 01.03.2005 Sr. No.29 which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re of LCD/LED television panels. Accordingly, he has concluded that since certain other components have to be attached converting it into a fully functional LCD, 'open cell' cannot be considered as LCD. On the above basis, learned Commissioner of Customs (Appeals) had concluded that that benefit of customs duty exemption in the exemption entry at Sr. No.29 & 30 of the Notification No.24/05-Cus., dated 01.03.2005 is not applicable to the impugned goods viz. "Open Cells" and "associated parts of Open Cells". 8.1 In order to properly appreciate the conclusion arrived at in the impugned order in denying the Customs duty exemption claimed by the appellants, we would like to firstly refer to the relevant exemption notification No.24/2005-Customs dated 01.03.2005 as amended, the relevant portion of which is extracted below: "Notification No. 24/2005-Customs New Delhi, dated the 1st March, 2005 10 Phalguna, 1926 (Saka) G.S.R. (E).- In exercise of the powers conferred by sub-section (1) of section 25 of the Customs Act, 1962 (52 of 1962), the Central Government, on being satisfied that it is necessary in the public interest so to do, hereby exempts the following goods, falling under t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or other phrases, the requirement of compliance is at varying levels from simple declaration/determination of 'for use' to 'sole and exclusive use'. In respect of these phrases used as 'all goods' which is further qualified for certain purpose such as 'for use', 'of a kind', 'for sole and exclusive use', 'for the manufacture' etc., there is a further requirement to examine whether these purposes for which the exemption have been extended by use of different phrases in the above Notification is also fulfilled in order to grant exemption under the respective entries at various serial numbers. 8.2 In careful examination of the impugned order passed by learned Commissioner of Customs (Appeals), we 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 o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed grounds for their claim of duty exemption benefits under Sr. No.29 & 30 of the Notification No.24/05-Cus., dated 01.03.2005, including the following: (i) Technical explanation of the item 'open cell' and how it is Liquid Crystal Device; (ii) Definition of Liquid Crystal Device provided under HSN Explanatory notes; (iii) Amendments to the customs tariff entry of Liquid Crystal Device over the years on account of HSN changes and the history of creation of separate entry for 'open cell' and later merging it with new tariff entries introduced under CTH 85.24 with effect from 01.01.2022 as part of HSN changes (iv) scope of the coverage of CTH 8524 in terms of chapter note 7 introduced w.e.f. 01.01.2022 and how the 'open cell' are specifically referred in the HSN explanatory notes under the category of flat panel display modules without drivers or control circuits. 9.2 However, we find that these have not at all been taken into consideration and not even an attempt made either to state whether these are relevant or not, and if so, why these are not relevant or if these points have relevance on exemption, how these enabled him to decide that the impugned goods are not eligible ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oder IC or application processer) or have otherwise assumed the character of goods of other headings. For the classification of flat panel display modules defined in this Note, heading 8524 shall take precedence over any other heading in the Nomenclature." 10.2 The Tax Research Unit of the Ministry of Finance, in bringing out the above changes introduced in the Budget for the year 2021-2022, vide D.O.F. No. 334/02/2020-TRU dated 01.02.2021 had issued instructions explaining the changes made in the First Schedule to the Customs Tariff as follows: "II. Amendments in Customs Tariff Act, 1975: (a) First Schedule to the Customs Tariff Act, 1975 is being amended to create specific tariff lines for certain items. (b) Changes to the first schedule to the Customs Tariff Act are being proposed that are to come into effect from 01.01.2022. This is in accordance with HSN 2022, which proposes 351 amendments to the existing harmonized nomenclature, covering a wide range of goods moving across borders. The amendments are necessary to adapt to the current trade through the recognition of new product streams, the changing nature of commodities being traded, advent of new technologies a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. 13.2 In this regard, we find that requirement of Section 17(5) ibid in passing of a 'speaking order' is a specific requirement and hence the basic requirement is to record the reasons for arriving at an order, which has not been fulfilled by the authorities below. We also find that the Hon'ble Supreme Court in the case of Kranti Associates Pvt. Ltd. Vs. Masood Ahmed Khan 2011 (273) E.L.T. 345 (S.C.) had elaborated in detail the various aspects of the speaking order that is required to be followed by a quasi-judicial authority or even an administrative authority. The relevant paragraphs of the above judgement are extracted and given below: "17. The expression 'speaking order' was first coined by Lord Chancellor Earl Cairns in a rather strange context. The Lord Chancellor, while explaining the ambit of Writ of Certiorari, referred to orders with errors on the face of the record and pointed out that an order with errors on its face, is a speaking order. (See 1878-97 Vol. 4 Appeal Cases 30 at 40 of the report) 18. This Court always opined ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... process. (m) It cannot be doubted that transparency is the sine qua non of restraint on abuse of judicial powers. Transparency in decision making not only makes the judges and decision makers less prone to errors but also makes them subject to broader scrutiny. (See David Shapiro in Defence of Judicial Candor (1987) 100 Harward Law Review 731-737). (n) Since the requirement to record reasons emanates from the broad doctrine of fairness in decision making, the said requirement is now virtually a component of human rights and was considered part of Strasbourg Jurisprudence. See (1994) 19 EHRR 553, at 562 para 29 and Anya v. University of Oxford, 2001 EWCA Civ 405, wherein the Court referred to Article 6 of European Convention of Human Rights which requires, "adequate and intelligent reasons must be given for judicial decisions". (o) In all common law jurisdictions judgments play a vital role in setting up precedents for the future. Therefore, for development of law, requirement of giving reasons for the decision is of the essence and is virtually a part of "Due Process"." Since these pre-requisites have not been followed by the authorities below in adjudication of the cases, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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