2015(12)LCX0124

IN THE CESTAT, SOUTH ZONAL BENCH, CHENNAI

S/Shri R. Periasami, Member (T) and P.K. Choudhary, Member (J)

SAMSUNG INDIA ELECTRONICS P. LTD.

Versus

COMMR. OF CUS. (AIR), CHENNAI

Final Order No. 41842/2015, dated 29-12-2015 in Appeal No. C/40731/2013-DB

Cases Quoted -

Orient Paper Mills v. Collector - 1989(12)LCX0036 Eq 1991 (051) ELT 0625 (Tribunal) - Referred [Para 7]
Salora International Ltd. v. Commissioner - 2012(09)LCX0001 Eq 2012 (284) ELT 0003 (S.C.) - Referred [Para 8]
Samsung India Electronics Pvt. Ltd. v. Commissioner- 2015(06)LCX0115 Eq 2015 (326) ELT 0161 (Tribunal) - Applied [Paras 7,9)
Secure Meters Ltd. v. Commissioner - 2015(05)LCX0008 Eq 2015 (319) ELT 0565 (S.C.) - Referred [Para 7]
Videocon Industries v. Commissioner - 2009-TIOL-653-CESTAT-MUM - Referred [Para 7]

Advocated By -

Shri R. Srinivasan, Advocate, for the Appellant.
Ms. Indira Sisupal, AC (AR),for the Respondent.

[Order per : P.K. Choudhary, Member (J)]. -

The appellant-company is engaged in the manufacture of computer monitor and registered with the Central Excise Department for manufacturing computer monitor. The appellant imports LCD (Liquid Crystal Devices) Panels. This appeal is filed against the Order-in-Appeal No. 93/2013, dated 29-1-2013 passed by the Id. Commissioner of Customs (Appeals), Chennai upholding the Order-in-Original No. 34/2010, dated 20-1-2010 passed by the Deputy Commissioner of Customs, Air Cargo Complex.


2. The brief facts of the case are that the appellant-company imported consignments of LCD Panels during November, 2009. The goods were described as "LCD PANEL (BN07-00703A) - FOR COMPUTER MONITOR" and classified under Tariff Item 9013 80 10 of the Customs Tariff Act. The appellant also claimed the benefit of BCD exemption under SI. No. 29 of Notification No. 24/2005-Cus. However, the assessing officer was of the view that the LCD Panels were more appropriately classifiable under Tariff Item 8529 90 90 and not under Tariff Item 9013 80 10. There was no revenue implication as the goods classifiable under CTH 8529 90 90 were eligible for benefits of BCD exemption vide SI. No. 18 of the same Notification No. 24/2005-Cus. The goods on re-classification were cleared by the appellant by observing the procedure set out in the Customs (Import of Goods at Concessional Rate of Duty for Manufacture of Excisable Goods) Rules, 1996.

3. The Id. Deputy Commissioner of Customs, Air Cargo Complex vide Order-in-Original No. 34/2010, dated 20-1-2010 passed order confirming the classification of the imported LCD panels under CTH 8529 90 90.


4. Aggrieved by the said order, the appellant filed an appeal before the learned Commissioner of Customs (Appeals), Chennai.

5. The impugned order was passed by the Id. Commissioner of Customs (Appeals), Chennai upholding the aforesaid Order-in-Original, confirming the classification of the imported goods under CTH 8529 90 90.


6. Being aggrieved with the impugned order, the appellant files the present appeal.

7. The appellant was represented by Sri R. Srinivasan, Advocate, who contended that there is no revenue implication related to the classification of the impugned goods as such. Goods which are classifiable under Customs Tariff Heading (CTH) 8529 90 90 are eligible for exemption from BCD under SI. No. 18 of Notification No. 24/2005; that the goods are correctly classifiable under CTH 9013 80 10 as liquid crystal devices which are subject to Nil rate of basic customs duty; that for disputes regarding classification, resort must be made to the General Interpretative Rules (GIR), in sequential order. GIR 1 states that classification shall be determined according to the terms of the heading of any relevant Section or Chapter Note; that the expression 'Liquid Crystal Devices' (LCD) has not been defined anywhere in the Section or Chapter Note. But the HSN describes the LCD as follows :-
"Liquid crystal devices consisting of a liquid crystal layer sandwiched be-tween two sheets or plates of glass or plastics, whether or not fitted with electrical connections, presented in the piece or cut to special shapes and not constituting articles described more specifically in other headings of the Nomenclature".
That what is sought to be covered under Tariff Item 9013 80 10 are all kinds of liquid crystal devices and the use of the term 'Devices' signifies that a broader area of goods are sought to be covered under Tariff Item 9013 80 10 and consequently LCD will include other items apart from LCD panels. Reference was also made to the various dictionary meanings of the term 'Devices'. It was further contended that a specific heading is to be preferred over a residuary heading. Various other contentions raised in the Grounds of Appeal were also reiterated. He relied on the Tribunal Delhi Bench recent decision in their own case in Tribu-nal's Final Order No. C/A/52760-52780/2015, dated 10-6-2015 [2015(06)LCX0115 Eq 2015 (326) ELT 0161 (Tribunal)], where the Tribunal on identical issue of classification of CED allowed their appeal. He relied following citations :-

1. Secure Meters Ltd. v. CCE - 2015-TIOL-100-SC-CUS = 2015(05)LCX0008 Eq 2015 (319) ELT 0565 (S.C.)

2. Orient Paper Mills v. CCE -1989(12)LCX0036 Eq 1991 (051) ELT 0625 (Tri.)


3. Videocon Industries v. CCE - 2009-TIOL-653-CESTAT-MUM.

8. Ms. Indira Sisupal, AC, the Learned Authorized Representative, contended that the impugned order merits to be upheld and the appeal of the assessee/appellant deserves to be dismissed. It was further contended that the ap
pellant had applied to the Central Excise Authorities to manufacture colour monitors by following the procedure laid down under the statute; that in the registration certificate, the appellant mentioned the details of import of raw materials as LCD Panel (9013 80 10); that the registration certificate clearly shows that the impugned goods are solely or principally used for the manufacture of colour monitors as raw materials/parts; that the goods are therefore rightly classifiable under 8529 90 90. She relied on the decision of the Hon'ble Supreme Court in the case of Salora International ltd. v. CCE - 2012 (284) ELT (3) S.C.


9. After having carefully gone through the records of the case and after hearing both sides, we find that the issue is as to whether the LCD PANEL which has been classified under Tariff Item 9013 80 10 of the Customs Tariff Act and is entitled for the benefit of BCD exemption under SI. No. 29 of Notification No. 24/2005 as claimed by the appellant or under 8529 90 90 as claimed by the Revenue. The issue is no more res Integra and is covered by the decision passed by the Delhi Bench of the Tribunal vide Final Order Nos. 52760 to 52780/2015, dated 10-6-2015, in the appellant's own case wherein the issue involved was identical and as to whether the classification of imported LCD under Chapter Heading 9013 80 10 vis-a-vis 8529 90 90. The relevant portion of the said decision is reproduced below :-
"5. We have considered the contentions of both sides. It is a fact that goods imported are not merely liquid crystal panels but articles comprising liquid crystal panel, driver, circuit, backlight unit, circuitry PCB and inverter etc. all in a metal casing. The Revenue calls these articles 'LCD modules'. Therefore there is force in the contention of Revenue that the judgment in the case of Videocon Industries Ltd. (supra), cited by the appellant may not be applicable to the present case as in that case the goods were Liquid Crystal Panels. Nevertheless the first relevant question to answer in this case is whether the goods which the Revenue calls "LCD modules" are Liquid Crystal Devices (LCDs). According to Google, device means "a thing made or adapted for a particular purpose, specially a piece of mechanical or electronic equipment". There is no doubt that the impugned goods (which have liquid crystal panels along with several other components) are made for a particular purpose (for LCD TV) and therefore they are clearly covered under the scope of the expression "liquid crystal device" (LCD). Indeed even the components of the impugned goods like liquid crystal panel, driver, backlight unit, inverter etc. are nothing but devices in their own right and therefore a combination thereof would also be a device and as the impugned goods have liquid crystal panel as one of the components, the im-pugned goods are clearly liquid crystal devices (LCDs). That the impugned goods (which Revenue calls LCD modules) are LC devices is not seriously contested by Revenue also and therefore any elaboration on this point is shunned. The only issue which now remains to be decided is whether these LCDs are covered CTH 9013 or 8529. The relevant parts of CTH 9013, 8528 and 8529 are reproduced below for convenience :

It is evident that Liquid Crystal Devices (LCDs) are specifically mentioned in CTH 9013. Therefore CTH 9013 would cover them unless it can be demonstrated that they are more specifically provided for in other headings. The Revenue's contention is that CTH 85.29 covers them more specifically because the impugned LCDs are parts suitable for use solely or principally with LCD TV which is covered under Heading 8528. While there is no doubt that these LCDs are parts suitable for use solely or principally with LCD TVs covered under CTH 8528, it has to be determined whether description of CTH 8529 is more specific vis-a-vis the description in CTH 9013 as far as the coverage of LCDs is concerned. CTH 9013 covers LCDs by name. Indeed its sub-heading 9013 80 10 exclusively covers only Liquid Crystal Devices (LCDs) and nothing else. However, there are Liquid Crystal Devices which are known by specific names, for example, LCD television, energy meters (having LCDs) which, though Liquid Crystal Devices, are more specifically covered under 85.28 and 90.28 respectively and therefore would get out of the scope of CTH 9013. Similarly even a watch can be a Liquid Crystal Device but is classified under CTH 9012 being more specifically covered there. Thus there are indeed a number of Liquid Crystal Devices which are provided for more specifically in other headings and are consequently not covered under CTH 9013. However, as stated earlier, CTH 90.13 covers LCDs by name and CTH 9013 80 10 is exclusively carved for LCDs. In contrast, the description of CTH 85.29, "parts suitable for use solely or principally with the apparatus of Heading 8525 to 8528" is general in nature. Thus, while LCDs are specifically mentioned in CTH 9013 which has a sub-heading exclusively for LCDs only, their coverage under CTH 85.29 can be only on the ground that the general description of CTH 8529 would cover LCDs as parts of LCD TV. It is thus obvious that between CTH 9013 and CTH 8529, the impugned LCDs are far more specifically provided for in CTH 9013 than under in CTH 85.29.

6. The reference to Section Note 2(b) of Section XVI of Customs Tariff Schedule was made by Revenue in support of its contention. That Section Note (2) is reproduced below :
"Subject to Note 1 to this Section, Note 1 to Chapter 84 and to Note 1 to Chapter 85, parts of machines (not being parts of the articles of the articles of heading 8484, 8544, 8545, 8546 or 8547) are to be classified according to the following rules :


(a) Parts which are goods included in any of the headings of Chapter 84 or 85 (other than headings 8409, 8448, 8466, 8473, 8487, 8503, 8522, 8529, 8538 and 8548) are in all cases to be classified in their respective headings;

(b) Other parts, if suitable for use solely or principally with a particular kind of machine or with a number of machines of the same heading (including a machine of heading 8479 or 8543) are to be classified with the machines of that kind or in heading 8409, 8431, 8448, 8466, 8473, 8503, 8522, 8529 or 8539 as appropriate. However, parts which are equally suitable for use principally with the goods of headings 8517 and 8525 to 8528 are to be classified in heading 8517;


(c) All other parts are to be classified in heading 8409, 8431, 8448, 8466, 8473, 8503, 8522, 8529 or 8538 as appropriate or, failing that, in heading 8487 or 8548."

As is evident from the above quoted Section Note, this note deals with the classification of parts of certain machines but Section XVI covers only Chapters 84 and 85 of Customs Tariff and therefore Section Note 2 to Section XVI would not be applicable to Chapter 90. Consequently when it comes to deciding classification under Chapter 90, this Section Note is of no avail; more so because Note (l)(m) of Section XVI clearly states that Section XVI does not cover articles of Chapter 90. Indeed by virtue of this Section Note (l)(m) and in view of the fact that, as discussed earlier, the impugned LCDs are more specifically covered under 9013 80 10 vis-a-vis their general coverage under CTH 8529, they would get classified under CTH 9013 rather than CTH 8529.


8. In the case of M/s. Secure Meters Ltd. v. CCf New Delhi - 2015(05)LCX0008 Eq 2015 (319) ELT 0565 (S.C), the Supreme Court had an occasion to decide the classification of LCDs which were parts of energy meters. Declaring that those LCDs are covered under CTH 9013, the Supreme Court in paras 15,16 & 19 observed as under:

15. Keeping in mind the aforesaid nature of product in question, we revert to the tariff entries. It cannot be disputed that LCDs are specifically provided in Tariff Item 9013. The only condition is that such LCDs should not constitute 'articles' provided more specifically in other headings. In the present case, it is also not in dispute that LCDs imported by the appellant did not constitute any such 'article' which is more specifically provided in other headings. On the contrary, the Revenue wants to include in the same Chapter, i.e., Chapter 90, though under Entry 9028.90.10 as "parts and accessories". The only reason for including the goods under Chapter Heading 9028 is that the LCDs were to be used in the electricity supply meters. However, Entry 9028 does not pertain to LCDs but gas, liquid, etc., and includes electricity supply meters as well. Merely because these LCDs are to be used as parts in the said electricity supply meters, can it be said that they are to be included in Entry 9028? Here, Note 2 of this Chapter Notes becomes important since LCDs are used in the electricity supply meters only as parts thereof.

Note 2(a) stipulates that parts and accessories which are goods included in the heading of the said Chapter, i.e., Chapter 90, are to be classified in their respective headings. Going by the plain reading of Note 2(a) it is clear that LCDs, which are goods and are used as parts in the final product mentioned in Chapter 90, namely, electricity supply meters, are to be classified in its respective heading. Respective heading, which is specifically provided, is 9013.


16. It was sought to be argued by Ms. Kiran Suri that as per Note 2(b), when these LCDs are used solely for particular instrument, namely, electricity supply meter, it has to be classified with the said meter and, therefore, Chapter Entry 9028 would get attracted. However, this argument loses sight of the fact that Note 2(b) relates to 'other parts and accessories', namely, it would apply to those parts and accessories for which Note 2(a) is inapplicable. Once we find that in the present case Note 2(a) squarely applies, the irresistible conclusion is that the goods will be classified in Tariff Item 9013, which is the specific heading for these goods.
19. This contains a general explanation to Chapter Note 2 and mentions that where parts or accessories identifiable as suitable for use solely or principally with the machines, appliances, etc., they are to be classified with those machines/appliances. However, what is important is that immediately thereafter it is clarified that this general rule would not apply in certain circumstances. Sub-para of the above takes things beyond the pale of any doubt by making it crystal clear that those parts and accessories which in themselves constitute 'article' falling in any particular heading of this Chapter, the general rule will not apply and said article would fall in that particular heading. To demonstrate this, examples which are given, eminently fit into the case at hand.

The Revenue has tried to distinguish this judgment of Supreme Court by stating that it referred to Note 2(a) of Chapter Note 90 while was applicable in that case as the energy meters also fell under Chapter 90 while in the present case LCD TVs fall under CTH 85.28. For the ease of reference Chap-ter Note 2(a) to Chapter 90 is reproduced below :

"2(a) Parts and accessories which are goods included in any of the headings of this chapter or of Chapter 84, 85 or 91 (Other than Heading 8487, 8548 or 9033) are in all cases to be classified in their respective headings."
Thus parts and iccessories which are goods included in any of the heading of this Chapter (i.e. Chapter 90) or Chapter 84,85 or 91 (other than Heading 8487, 8548 or 9033) are in all cases to be classified in their respective headings. Chapter Note 2(a) also referred to Chapters 84, 85 and 91 apart from Chapter 90. Thus as per this Chapter Note [2(a)], the impugned LCDs being included in CTH 9013 will get classified there and the ratio of the Supreme Court's judgment in the case of Secure Meters (supra) is not distinguishable on the basis of that Chapter Note; indeed, quite to the contrary, it applies mutatis mutandis to the present case. By holding that LCDs suitable for use solely or principally with energy meters are more specifically covered under CTH 9013, the Supreme Court has, in effect, declared that CTH 9013 covers LCDs (for energy meters) more specifically than CTH 9028 90 10 which covers "parts and accessories" of energy meters. It clearly follows from the said Supreme Court judgment that the description "parts suitable for use solely or principally with LCD TV" does not cover LCDs for LCD TVs as specifically as the description of CTH 9013 which covers LCDs by name and devotes a sub-heading (9013 80 10) exclusively therefor."


10. Apart from the Tribunal ruling, we also have noticed that based on HSN which has described LCD and from the fact that the wordings contained in CTH 9013 80 10 are different from other entries dealing with LCD Technology. Tariff Heading 9013 covers LCD not constituting Article provided for more specifically in other headings. Explanatory Notes to the Heading 9013 also provide similarly and the panel under dispute are not described more specifically in any other heading. Therefore, the specific mention of LCD in Tariff Item 9013 80 10 is more specific. Our view is fortified in view of the exclusion of the Heading 9013 which would apply only to Articles which are more specifically provided for in other headings in the form of specific entries. In view of this we hold that the LCD panel in the condition in which it is imported, are more specifically covered under 9013.

11. In view of the above, the impugned order is set aside and the appeal is allowed with consequential reliefs, if any.
(Operative part of the order pronounced in open Court)

Equivalent 2016 (337) ELT 0087 (Tri. - Chennai)