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TMI Blog2025 (3) TMI 695X X X X Extracts X X X X X X X X Extracts X X X X ..... s, the court must give effect to the words used in the statute. Besides, in a taxing Act one has to look merely at what is clearly said and there is no room for any intendment. In a taxing statute nothing is to be read in, nothing is to be implied, one can only look fairly at the language used. It is found that based on the first principle of interpretation, the impugned goods were found covered under a specific heading which conveys only one meaning and were correctly determined to discharge IGST @ 18% as per S. No. 376AA of Schedule III of Notification No. 19/2018-IT (Rate) dated 26.07.2018, during the relevant period, by the Original Authority. Due to a lack of ambiguity in the rate notification and in the light of the judgment of the Hon'ble Apex Court in Simplex Mills Co. Ltd. [2005 (3) TMI 117 - SUPREME COURT], there is no necessity here, to examine the claim of the goods at S. No. 203 of Schedule II to N/N. 01/2017 - IT (Rate) and muddy the clear water. An aid to interpretation of the terms used in a statute or notification is resorted to only when there is some ambiguity in the words or expression used, which is not so the case here. No Interest or Penalty is leviable in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an Muralidharan Aravindh, learned counsel appeared for the M/s Flextronics and Shri Anoop Singh, learned Authorized Representative appeared for Revenue. 3.1 The Ld. Advocate for the appellant submitted as follows : (A) The Subject Goods are chargeable to IGST @ 12% as per Sl. No. 203 of Schedule II to Notification NO. 01/2017 - IT (RATE) - It is not disputed that the imported goods are lithium-ion batteries meant for use in cellular mobile phones. The subject goods viz., lithium-ion batteries are integral 'parts' of cellular mobiles without which the mobile phones are incomplete and cannot function. The Ld Advocate stated that S. No. 203 is a more specific heading as lithium-ion batteries used for the manufacture of cell phones is more specific when compared to an entry which covers all lithium-ion batteries which may be for multiple uses such as motor vehicles, electronics, power tools etc. S. No. 376AA is a more general entry covering all types of lithium-ion batteries. Resultantly, the subject goods are chargeable to IGST at the rate of 12% under S. No. 203 of the Rate Notification. (B) Without Prejudice, no Interest is leviable on the Appellant in the Absence of Machinery ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wireless networks Was not inserted Electric accumulators, including separators therefor, whether or not rectangular (including square) From 26.07.2018 to 31.03.2020 Parts for manufacture of Telephones for cellular networks or for other wireless networks Lithium-ion Batteries Electric accumulators, including separators therefor, whether or not rectangular (including square) other than Lithium-ion battery and other Lithium-ion accumulators including Lithium-ion power banks Post 31.03.2020 Omitted Lithium-ion Batteries Electric accumulators, including separators therefor, whether or not rectangular (including square) other than Lithium-ion battery and other Lithium-ion accumulators including Lithium-ion power banks IGST rate applicable to Lithium ion batteries. 4.1 It is the appellants contention that; a) The imported lithium-ion batteries are integral 'parts' of cellular mobiles without which the mobile phones are incomplete and cannot function and is not in dispute. b) The imported goods were classified under CTI 8507 6000 and is not disputed by the department. c) S. No. 17 of Notification No. 57/2017 - Cus. dated 30.06.2017 describes the goods as 'lithium-ion bat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ll reject that construction which will defeat the plain intention of the Legislature even though there may be some inexactitude in the language used. The Courts, ae very reluctant to hold that the Parliament has achieved nothing by the language it used when it is tolerably plain what it seeks to achieve. Lithium-ion batteries are likely to be a part or accessory of some machine or equipment, it cannot be the legislative intent that by classifying the impugned goods as per the main equipment or machine S. No. 376AA of Schedule III to Notification No. 01/2017 - IT (Rate), as inserted by Notification No. 19/2018-IT (Rate) dated 26.7.2018 become redundant. 4.3 We find that; a) Goods should be classified based on their description and condition when entered for import. b) As laid down by the Hon'ble Supreme Court in Commissioner of Central Excise v. Simplex Mills Co. Ltd. [(2005) 3 SCC 51 / 2005 (181) E.L.T. 345 (S.C.)], the General Rules of Interpretation will come into play, as mandated in Rule 1 itself, only when no clear picture emerges from the terms of the Headings and the relevant section or chapter notes. c) In the case of ambiguity while classifying goods under the Custo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d by the parties in no uncertain terms. Even a stray line in an order cannot be seen as being conclusive of a fact if the material fact was not raised before the Original Authority and tested through discussion. This is because of the inability of words to always achieve precision and language being an inadequate vehicle of thought. Sometimes words unwittingly convey more than what one meant. As stated by the Hon'ble Justice O. Chinnappa Reddy, in Girdhari Lal & sons Vs Balbir Nath Mathur [(1986) 2 SCC 237],: "6. . . . Words are but mere vehicles of thought. They are meant to express or convey one's thoughts. Generally, a person's words and thoughts are coincidental. No problem arises then, but, not infrequently, they are not. It is common experience with most men, that occasionally there are no adequate words to express some of their thoughts. Words which very nearly express the thoughts may be found but not words which will express precisely. There is then a great fumbling for words. Long-winded explanations and, in conversation, even gestures are resorted to. Ambiguous words and words which unwittingly convey more that one meaning are used. Where different interpretations are ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ries that are parts of cellular phones as done in the case of S. No. 139 shown at the table at para 4 above. j) The Appellant has averred that S. No. 203 is a more specific heading, as lithium-ion batteries used for the manufacture of cell phones is more specific when compared to an entry which covers all lithium-ion batteries which may be for multiple uses such as motor vehicles, electronics, power tools etc. Even going by the appellant claim of 'parts', we find that "Lithium-Ion Batteries" is the genus (specific heading) and "parts of cellular phones" are, if at all, an indistinct species (residuary heading), thereof. Hence this averment of the appellant has no merits. k) Personal hearing is not an empty formality. However, the appellant has not appeared for the PH on three occasions, which were opportunities not utilized to put forward their points with clarity, especially on the issue of 'parts' among others, in person, in spite of not even having replied to the SCN issued to them. 4.4 The Hon'ble Supreme Court in Bengal Immunity Co. Ltd. v. State of Bihar & Ors., AIR 1955 SC 661, stated that a legal enactment must be interpreted in its plain and literal sense, as that is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r that the appellant has started paying 18% duty from the month of August. Judgments 5. We now examine the judgments stated by the appellant; (A1) The appellant has stated that, lithium-ion batteries are integral 'parts' of cellular mobiles without which the mobile phones are incomplete and cannot function. Reference in this regard was made to the decision of the Hon'ble Tribunal in the case of Jas Telecom [2019 (369) E.L.T. 1515 (Tri. - Bang.)] Further, various decisions have ruled that a part is an essential component of the whole without which the whole cannot function. Reliance in this regard was placed on the following decisions; Commissioner v. Insulation Electrical Private Limited [2008 (224) E.L.T. 512 (S.C.)] and CTO, Anti Evasion, Circle III, Jaipur v. Prasoon Enterprises [2019 (23) G.S. T.L. 441 (S.C.)]. The classification of goods involves an issue of fact and law, which in this case was not agitated before the Original Authority, as discussed above. Mere reference to law without stating the actual use, essentiality etc. of the impugned goods cannot prompt a decision ipse dixit. Further, as discussed above lithium-ion batteries carry a specific heading. The apex Cou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t Director Of Income Tax vs Green Emirate Shipping And Travels [(2006) 100 ITD 203 (MUM) / [2006] 286 ITR 60 (MUM)], after referring to the Hon'ble Supreme Court's judgment in Union Of India And Anr vs Azadi Bachao Andolan And Anr [AIR 2004 SUPREME COURT 1107], held that the Authority for Advance Rulings, not being a part of the judicial hierarchy, cannot lay down a binding precedent for anyone - the Revenue, the assessees or the appellate authorities. (C) The appellant has stated that The Principle of Contemporaneous Expositio states that a statute must be constructed or interpreted in the manner in which the administrative or executive officers enacting the statute have interpreted the statue. Reliance in this regard is placed on the decision of Spentex Industries Ltd. v. Commissioner of Central Excise [2015 (324) E.L.T. 686 (S.C.)]. They have also referred to the recommendation of GST Council as being highly persuasive for interpreting the rate entries. The said judgment and recommendations are of no relevance when the matter is being decided on the basis of the first principle of interpretation. (D1) The appellant has further averred that it is settled principle of law that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CTA. However, the CTA has limited provisions, and it borrows various provisions from the Customs Act for implementation of its provisions. Section 3(12) of the CTA, which is the borrowing provision with regard to IGST, did not borrow provisions of interest from the Customs Act. Therefore, it is submitted that interest cannot be recovered for non-payment of IGST which is chargeable under Section 3 of the CTA. 6.1 Section 3(12) of the Customs Tariff Act, 1975, as it stood just prior to the Finance (No 2) Act 2024 been notified on 16th August 2024, is extracted below for ease of reference: 3(12) The provisions of the Customs Act, 1962 (52 of 1962) and the rules and regulations made thereunder, including those relating to drawbacks, refunds and exemption from duties shall, so far as may be, apply to the duty or tax or cess, as the case may be, chargeable under this section as they apply in relation to the duties leviable under that Act. While interest is compensatory in character, the Sub-Section above did not make any reference to interest. Although the Section 3(12) as it stood above is an inclusive one and should be given a broad meaning, Constitutional Courts have held that dem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... duced below. "(12) The provisions of the Customs Act, 1962 and all rules and regulations made thereunder, including but not limited to those relating to the date for determination of rate of duty, assessment, non-levy, short-levy, refunds, exemptions, interest, recovery, appeals, offences and penalties shall, as far as may be, apply to the duty or tax or cess, as the case may be, chargeable under this section as they apply in relation to duties leviable under that Act or all rules or regulations made thereunder, as the case may be.". (emphasis added) The legislature having now incorporated 'interest' into the Customs Tariff Act, 1975, the same can be demanded for non-payment of IGST only after the substitution of the said sub-section as above, from 16.08.2024 and not on the impugned goods which were imported before that date. The appellants prayer hence succeeds on this issue. 7. In the light of the discussions above the impugned order is modified as under; A) The demand for IGST on "lithium-ion batteries" @ 18% as per S. No. 376AA of Schedule III to Notification No. 01/2017 - IT (Rate), is upheld. B) The demand for interest is set aside. The appellant is eligible for cons ..... X X X X Extracts X X X X X X X X Extracts X X X X
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