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TMI Blog2024 (5) TMI 1334X X X X Extracts X X X X X X X X Extracts X X X X ..... he Tribunal set aside the adjudication order which applied Rule 2(a) in similar case where also CTPs were not removed by the supplier with other parts/Sub-assemblies. The aforesaid order of the Tribunal was assailed by the Department before the Supreme Court in COMMISSIONER OF CENTRAL EXCISE, NOIDA II VERSUS M/S. LG ELECTRONICS INDIA PRIVATE LIMITED ETC. [ 2023 (4) TMI 1326 - SC ORDER] and the Civil Appeal was dismissed holding that ' on closer scrutiny of the unique facts of this case, it is our view, the goods of the appellant may not be said to be parts as per Section Note 2 to Section XVI of the Tariff. The appellant not only used to assemble all parts of the Television Receivers and make complete television sets, but the said Television Receivers were also operated in the manufacturing unit of the appellant and thoroughly checked and only upon it being confirmed that the Television Receivers were complete in all respects, they were disassembled and along with relevant material and individual serial numbers, sent to the various satellite units.' The impugned order passed by the Commissioner is set aside - Appeal allowed. - HON BLE MR. P. K. CHOUDHARY , MEMBER ( JUDICI ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 85.29 of the Tariff and appropriate central excise duty was being paid on the same and cleared to Original Equipment Manufacturers OEMs . The Appellant did not clear Colour Picture Tube CPT to the OEMs. These parts/sub-assemblies supplied to the OEMs were never assembled into a complete CTV in the factory of the Appellant. Accordingly, the same were never tested as CTV in the factory of the Appellant and then unassembled. The Appellant was not clearing all the parts required for manufacturing CTV at the same point of time, rather similar type of parts was cleared in one consignment. The OEMs with the help of the parts/sub-assemblies received from the Appellant and after receiving other components/parts including CPTs from the other manufacturers, manufactured complete CTVs and cleared the same on payment of appropriate central excise duty on the basis of MRP declared on the package of the CTVs. It is significant to note that there were two most critical parts in the manufacture of CTV i.e. (1) picture tube and (2) populated printed circuit boards. Thus, all the critical parts, which were required for the manufacture of CTVs were never supplied by the Appellant to these OEMs. In Oct ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the Tribunal s order in the case of M/s L. G. Electronics India Pvt. Ltd. vs. CCE, Noida-II(supra) are reproduced for ready reference:- 15. The first issue that arises for consideration is regarding Interpretative Rules 2(a) of the Central Excise Tariff. The order of the Commissioner is based on this rule 2(a) and, therefore, it will be necessary to reproduce it and rule 1 also and they are as follows: The Schedule-Excise Tariff Rules for the Interpretation of the this Schedule 1. The titles of Sections and Chapters are provided for ease of reference only; for legal purposes, classification shall be determined according to the terms of the headings and any relative Section or Chapter Notes and, provided such headings or Notes do not otherwise require, according to the provisions hereinafter contained. 2. (a) Any reference in a heading to goods shall be taken to include a reference to those goods incomplete or unfinished, provided that, the incomplete or unfinished goods have the essential character of the complete or finished goods. It shall also be taken to include a reference to those goods complete or finished (or falling to be classified as complete or finished by virtue of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Assessments were also being made under the relevant heading or sub-heading in respect of each component as and when Bs/E were presented during the relevant period. It is in the background of the factual position, as above, we are to consider whether by applying Rule 2(a) of the Interpretative Rules the components imported are to be treated as CTV presented unassembled. 17. In the light of the authoritative pronouncement of the Apex Court, it is beyond challenge that HSN Explanatory Notes to Rule 2(a) has to be applied while considering the relevant Tariff Entry for each item. ****** 19. It is also explained in HSN Notes that, for the purpose of Rule 2(a), articles presented unassembled or disassembled means articles the components of which are to be assembled either by means of simple fixing devices (screws, nuts, bolts etc.) or by riveting or welding, for example, provided only simple assembly operations are involved. 20. The assembly of the components of CTV involves a complex operation and not a simple one. ***** ( emphasis supplied ) 19. The aforesaid order of the Tribunal was assailed by the Department before the Supreme Court and the Civil Appeal was dismissed with the foll ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lant to the manufacturers containing all the parts of CTVS at the same point of time. All the consignment of sub-assemblies/parts (except for 21 Flatron) the colour picture tubes were not supplied and the colour picture tubes were always purchased by the manufacturers from the picture tubes manufacturers directly. In the case of parts meant for 21 Flatron, the appellant did not supply the populated colour picture tubes, which were purchased by the manufacturers from other manufactures. Thus, when the consignments cleared by the appellant did not contain all the parts at the same point of time, Interpretative Rule (a) cannot be pressed into service. 21. It is, therefore, not possible to accept the contention of the learned authorized representative appearing for the Department that complete assemblies/sub-assemblies of CTVS were supplied to the original equipment manufacturers. 22. Even otherwise, rule 2(a) could not have been invoked for the reason that classification of the goods in the present case would be governed by Section Note 2 to Section XVI of the Central Excise Tariff and the Rules of Interpretation would not be applicable at all. Rule 1 provides that the goods are to be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... laid down by this Court in Commissioner of Central Excise, Nagpur v. Simplex Mills Co. Ltd. - (2005) 3 SCC 51 = 2005 (181) E.L.T. 345 (S.C.) may be seen to be applicable in this case. In that decision, a three judge bench had the following to say on the subject: The rules for the interpretation of the Schedule to the Central Excise Tariff Act, 1985 have been framed pursuant to the powers under Section 2 of that Act. According to Rule 1 titles of Sections and Chapters in the Schedule are provided for ease of reference only. But for legal purposes, classification shall be determined according to the terms of the headings and any relevant section or Chapter Notes . If neither the heading nor the notes suffice to clarify the scope of a heading, then it must be construed according to the other following provisions contained in the Rules. Rule-I gives primacy to the Section and Chapter Notes along with terms of the headings. They should be first applied. If no clear picture emerges then only can one resort to the subsequent rules. 20. Therefore, as clearly specified by the above rule, resort must first be had only to the particular tariff entries, along with the relevant Section and Cha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s our view, the goods of the appellant may not be said to be parts as per Section Note 2 to Section XVI of the Tariff. The appellant not only used to assemble all parts of the Television Receivers and make complete television sets, but the said Television Receivers were also operated in the manufacturing unit of the appellant and thoroughly checked and only upon it being confirmed that the Television Receivers were complete in all respects, they were disassembled and along with relevant material and individual serial numbers, sent to the various satellite units. Once the Television Receivers are assembled or are made completely finished goods, the manufacturing process is over and we are not concerned as to what happens subsequently. Whether they are sent to the satellite units of the appellant in its complete form or in a disassembled form is irrelevant. (emphasis supplied) 25. The Tribunal in Bigesto Food Pvt. Ltd. vs. Commissioner of Customs, Central Excise Central GST, Noida made the following observations in connection with assemblies and sub-assemblies of CTV: 14. We find that in this case there is no requirement to proceed to Rule 2 (A) of Interpretation of the Schedule to t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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