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TMI Blog2024 (9) TMI 189X X X X Extracts X X X X X X X X Extracts X X X X ..... eld; Silicone Key Pad, Buzzer and LCD will be classified under Tariff Heading 84159000, item at Sr. No. 17 Zebra/Keypad under Tariff Heading 40169990 and item at Sr. No. 18 i.e. Spring under Tariff Heading 73209090. Appeal disposed off. - HON'BLE MEMBER (TECHNICAL), MR. RAJU And HON'BLE MEMBER (JUDICIAL), MR. SOMESH ARORA Shri. Alok Agarwal Shri. Prachit Mahajan, Advocates for the appellant Shri. Girish Nair, Assistant Commissioner (AR) for the respondent ORDER SOMESH ARORA Factual Matrix of the Case:- M/s Elite Electronics ( Appellant ) having a manufacturing facility is engaged in manufacturing of Remote Controls (Handsets); Electronic Controllers; PCB Assemblies, which are supplied to various Air Conditioner manufacturing companies like M/s Johnson Controls Hitachi Air Conditioning India Ltd., Blue Star, etc. The present case relates to import of only 11 electrical components viz, capacitors, ICs, Bare PCBs, LED, Fuse, Relay, etc. (as in Table below) out of total 41 components required for manufacture of the Remote Handset and import of only 20 electrical components (as in Table below) out of total 145 components required to manufacture the Main PCB , by classifying th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hine, are classified in the same heading as that machine . iii. The Ld. Commissioner has applied Rule 2(a) of General Rule of Interpretation (G.R.I), treating these goods as presented Unassembled or disassembled. iv. The Ld. Commissioner has held that Appellant has accepted CRA objection in case of import of LCD Display. v. The NIDB data indicate that Parts of A.C. such as Main PCB and Remote Control Handset are classifiable under CTH 84159000. 2.1 It was pleaded by the appellant that the Ld. Commissioner has erred grossly since, all the findings are factually incorrect as per this submissions below: i. The Appellant is importing few components required for manufacturing of Main PCB of A.C. or Remote Control and procured majority of the components domestically. These components are imported from separate suppliers in different Bills of Entry as indicated in para 4 7 of O-I-O itself, hence as per appellant Rule 2(a) of General Rule of Interpretation (G.R.I) is not applicable. ii. However, as per the impugned Order para 17(i), it has been emphasized by the department that the Appellant had imported Bare PCB without any surface mounted devices (SMDs) like Capacitor, resistors, Integra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CTH 84159000 as Part of A.C. since, the said goods don t have any specific heading in the Customs Tariff Act, 1975 unlike in case of said imported electrical/ electronic components. 2. In this regard, it is submitted that the said imported Silicone Keypad are not product specific since, these are procured from open market and remote control is designed by the Appellant as per the requirement. The said imported goods were always examined and cleared under the supervision of shed officers. 3. That the said imported item was classified under CTH 39269099 as insisted by the Appraising officers consistently, since, the said CTH attracts higher rate of customs duty i.e. 15% BCD. Further, the full duty structure is 15% BCD, 10% SWS and 18% IGST. 4. That in case, the said imported item is classified under CTH 84159000 as Part of A.C. as proposed by the department, it attracts lower rate of customs duty i.e. 10% effective BCD as per S.No. 449A of Notification No. 50/2017-Cus. dt. 30/06/2017 (Copy enclosed as A/2) and the revised duty structure will be 10% BCD, 10% SWS and 28% IGST. It is submitted that since, the input tax credit is available on IGST and it is revenue neutral situation, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ply Transformer, LCD, Relay etc. were imported by the Noticee separately to be used for the manufacture of Air-conditioner and AC remote only. ii. The Section Note provided under Parts (Section Note 2) of HSN explanatory Note to Section XVI of Customs Tariff states that parts which are suitable for use solely or principally with particular machine or apparatus or with a group of machines or apparatus falling in the same heading are classified in the same heading as those machines of apparatus iii. The first part of Rule 2 (a) of the General Rules of Interpretation of First Schedule to Import Tariff of Customs extends the scope of any heading which refers to a particular article to cover not only the complete article but also that article incomplete or unfinished, provided that, as presented, it has the essential character of the complete or finished article. The second part of Rule 2 (a) provides that complete or finished articles presented unassembled or disassembled, usually for reasons such as the requirements or convenience of packing, handling or transport, are to be classified in the same heading as the assembled article. iv. The imported product i.e. goods as mentioned in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -essential components of part of air conditioners or air conditioning remote system. It is undisputed in this case that the parts imported by the Noticee under various Dills of Entry as mentioned in Annexure A to the Show Cause Notice are solely and exclusively used for the manufacture of AC remote handsets. It is also undisputed that Bare PCB along with various surface mounting devices like IC, Capacitor, Switching Power Supply Transformer, LCD, Relay etc. have been imported by the Naticee separately to be used for the manufacture of Air-conditioner and AC remote only. Noticee is not found to have produced any evidence or submission to suggest that these impugned items imported by them would be used in the manufacture of parts of any machinery/machine other than the Air conditioner or Air Conditioner remote handsets. In fact, Noticee vide letter dated 09.05.2023 have stated that they are engaged in manufacturing of Remote Controls (Handsets) etc and for the same they have been importing various components such as Bare PCB, IC, Diode, IR LED, LED Backlight, Transistor, Capacitors, Resistors etc as Parts used for manufacturing of AC Remote system'. Copies of concerned Bills of E ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... However, this is not the situation in the present case as Section Note provided under Parts (Section Note 2) of HSN explanatory Note to Section XVI of Customs Tariff states that parts which are suitable for use solely or principally with particular machine or apparatus or with a group of machines or apparatus falling in the same heading are classified in the same heading as those machines of apparatus. 18.4 It is argued that Apex Court in the case of Commissioner of Customs, New Delhi vs. Sony India Ltd, reported in 2008 (231) ELT 385(SC), held that Rule 2(a) of GRI is applicable only if all the imported components are presented at the same time for customs clearance and clubbing of consignments of different ent dates is not permissible. Hon'ble Supreme Court decision in the case of Sony India (supra) which relates to import of components of Colour TVs in CKD condition and the same cannot be made applicable to this case. The Hon'ble Supreme Court in that case held that those goods which are brought not having essential character of Colour TV, it cannot be taken as Colour TV whereas in the present case, the goods for manufacturing Air Conditioners/Air Conditioner Remote hand ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be processed through complex soldering processes after procuring other required materials domestically and hence, such a reliance and contention of the Department on the basis of said import data is invalid and unsustainable. This contention is also not proper. It is an undisputed fact that the Bare PCB procured by them are used in the manufacturing of parts used for manufacturing PCB assemblies, which is part of Air Conditioners and hence classifiable under Customs Tariff Heading 84159000. Thus, I find that aforesaid NIDB data pertaining to import of parts of Air Conditioner along with Remote Control classified under Customs Tariff Heading 84159000, is correctly referred in the subject Show Cause Notice. 18.7. It would be evident from aforesaid paras that the the impugned imported items merit classification under Customs Tariff Heading 84159000 as proposed by the Show Cause Notice . 6. We have considered the contrarian submissions, as brought out before us. The appellants are engaged in manufacturing Remote Control Handset , PCB Assembled after mounting which are supplied to various Air Conditioner manufacturing companies. Such Remote Control Handsets use approximately 145 compon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Chapter 85. Further, Silicone Keypad has been stated to be initially classified under Chapter 84159000 and later on under Chapter 39269099 later on by the party, since party is not contesting the same and it is no one s objection to same being classified under Tariff Heading 84159000. Therefore, it is held that silicone Keypad like Buzzer and LCD of the type imported will be classified under Tariff Heading 84159000. Items at Serial No 17 of the table i.e. Zebra/Keypad being item of vulcanise rubber other herd rubber shall be appropriately classified under Customs Tariff Heading 40169990 due to exclusion clause by virtue of Section Note to Chapter XVI and as justified from Note 1 A of Section XVI. Thus, Zebra/Keypad is correctly classifiable under CTH 40169990. Similarly, Spring mentioned at Serial No. 18 being item of general use and article of iron or steel has been correctly classified under Chapter 73209090 in classifying various items as above. In our reasoning, we have been guided by the principle that specific Chapter Notes and Section Notes are to be preferred over General Interpretative Rules while classifying product. The principle was endorsed by the Hon ble Apex Court i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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