2014(07)LCX0061

IN THE CESTAT, PRINCIPAL BENCH, NEW DELHI [COURT NO. II]

S/Shri D.N. Panda, Member (J) and Manmohan Singh, Member (T)

Havell's India Ltd.

Versus

Commissioner of Customs, New Delhi

Final Order No. C/A/52873/2014-CU (DB), dated 22-7-2014 in Application No. C/Misc./52107/2014 CU (DB) in Appeal No. C/5/2008-CU(DB)

Cases Quoted -

Leader Electricals Pvt Ltd. v. Commissioner - 2005(08)LCX0087 Eq 2006 (193) ELT 0364 (Tribunal)
- Referred [Paras 9.2, 18]

Departmental Clarification Quoted-

C.B.E. & C. order No. 5/93, F. No. 13/01-1993-CX-l, dated 20-9-1993 [Para 9.3, 19]

Advocated By -

Shri Rajesh Kumar, Advocate, for the Appellant. Shri V.P. Batra, DR,for the Respondent.

[Order per : D.N. Panda, Member (J)] -

The appellant M/s. Havell's India filed Bill of Entry No. 272400 dated 11-3-2006 and Bill of Entry No. 272437 dated 11-3-2006 declaring import of 11,200 and 4,800 Nos. 'Lighting fitting Compact Recessed Down light Innova 11-6400K-GU5.3 with Electronic Ballast' valued at Rs. 10,79,203/- and Rs. 4,62,516/- respectively. The second Bill of Entry also covered 'Lighting fitting Compact Recessed Down lights Innova 11-6400K-GU5.3 with Electronic Ballast' valued at Rs. 8,37,985/- and 441 Nos. of spare Unit Lamps for Innova-11 valued at Rs. 13,130/- as well as other goods.

1.2 Appellant produced Invoice Nos. TG06HAV-010-1 dated 9-3-2006 and TG06HAV-010-2 dated 9-3-2006 respectively; both issued by M/s. Hangzhou Tiger Electron &, Electric Co. Ltd., China for verification. Bills of Entry accordingly were assessed as per declaration of the importer and goods were cleared on 14-3-2006.


2. Appellant filed another Bill of Entry No. 282078 dated 22-3-2006 for clearance of Identical/similar goods in respect of 13,000 Nos. 'lighting fitting Compact Recessed Down Light Innova 11-6400K-GU5.3 with Electronic Ballast' and claimed classification thereof as 94051090. Along with such goods 260 Nos. Spare units lamps for Innova 11 and 130 Spare units Ballast for Innova 11 were also imported. The unit price of the goods were declared as US $ 0.65 and US $ 0.70 respectively and total value of consignment was declared as Rs. 12,66,721/-(Assessable Value). Invoice No. TG06HA V-03-001 dated 15-3-2006 issued by M/s. Hangzhou Tiger Electron & Electric Co. Ltd., China was produced for assessment.

3.1 First check of the goods imported as above was done and repre-sentative samples were taken. It was seen that the item packed in retail pack was Compact Fluorescent lamp fitted with aluminium cover and attached to Electronic Ballast with socket, with the descriptions reading as Havell's Compact Cold Cathode Spotlight' and The best replacement of MR 16 halogen lamp'. The packing also disclosed the Cat No. as HOC43111-E, Ord. Code: LUHOC43111664, Qty. 1 Pc. and MRP: Rs. 410/- also found printed on the packing.

3.2 Appellant claimed classification of the imported lamps under CTH 94051090 which covers lamps and lighting fittings including search lights & spotlights and parts thereof, not elsewhere specified or included. As per chapter note 1 (f) of chapter 94, lamps and lighting fitting covered by chapter 85 are excluded from chapter 94. Revenue claimed that the goods imported by the appellant shall be classified under Tariff Heading 8539.

3.3 Appellant replied by its letter dated 24-3-2006 that it had imported complete Innova spotlight comprising of Recessed Down light i.e. CCFL permanently fitted with anodized Aluminium Reflector. Those were complete light fitting with permanent light source and spotlight & specifically covered under chapter 9405, not being a lamp under CT 8539. The light was combination of 3 more components and used in ceiling application throwing beam of light confined for a small diameter so that it can give very concentrated beam to lighten the object.

3.4 Appellant submitted a printed catalogue of Innova Spot Light featuring the goods to the Authority below. As per catalogue, the goods combined with 'Fixtures' were defined to be spotlight with details as 'Ready to use complete set: Round fixture, Innova Lamp & Electronic Ballast with GU 5.3 Lamp holder'. But customs noticed that the goods imported were 'without fixtures'.

4.1 Enquiries were conducted from National Physical Laboratory (Council of Scientific & Industrial Research), New Delhi and M/s. Phoenix Lamps Limited, Noida to ascertain the character of the goods for classification seeking opinion on following aspects :
(i) The nature and use of the goods.
(ii) Whether the goods were compact fluorescent lamps or not.
(iii) Whether the lamp is made of Hot cathode or cold cathode and
(iv) Nature & use of aluminium cover fitted on the lamp.

4.2 The National Physical Laboratory (Council of Scientific & Industrial Research), New Delhi opined as under :

(1) The Lamp is a normal lamp and is general lighting purpose.
(2) The Lamp is a compact fluorescent lamp.
(3) Normal fluorescent lamps are hot cathode lamps. However, the packing of the lamp reads it as compact cold cathode lamps. We do not have the facility for testing whether it is a cold cathode/hot cathode lamp. To resolve the problem, the party is requested to re-fer the case to the manufacturer of the lamp.
(4) The aluminium cover is to protect the lamp.
5.1 Test reports of M/s. Phoenix Lamps Ltd. stated as follows :-
(1) The item in question is used for general lighting purpose.
(2) That is Compact Fluorescent Lamps with ballast.
(3) That is not cold cathode Fluorescent lamps category as per our evaluation.
(4) The aluminium cover fitted on the lamp is for light reflection & focusing.


5.2 While Revenue relied on the reports of the National Physical La-boratory and Phoenix Lamps Ltd. to support its contention of classifying the goods under CTH 8539, appellant obtained test report to support its claim of classification under CT 94051090. Report on the samples given by the National Physical Laboratory and Phoenix Lamps Ltd. were used as evidence by Revenue to reach to conclusion. According to Ld. Adjudicating Authority, the technical literature/catalogue of the supplier accompanying the goods did not show that the goods were cold cathode lamps. There was mention therein that the goods were the best replacement for MR 16 halogen bulbs and has a life of 8000bh. The packet containing the goods disclosed that lamp contained therein was cold cathode and the best replacement for MR 16 halogen lamp. According to Revenue, the main difference between hot cathode and cold cathode are :

(a) The hot cathode has a filament inside the tube while the cold cathode does not have one.
(b) The hot cathode and cold cathode are both CFLs.
(c) Hot cathode has a life of 8,000 -10,000 hours and less while the cold cathode has a longer life of almost five times the life of hot cathode i.e., 50000 hours and this is the biggest advantage of cold cathode over hot cathode.


6.1 On analysis of the literature accompanying the goods it was noticed by customs that the light imported has a life of above 8000 Bh hrs which is nearer to the life of hot cathode light but is only one sixth of the life of a cold cathode. Further, the literature did not state that the goods were cold cathode. It was concluded that the goods in question were hot cathode and not cold cathode. The only thing in support of the claim of cold cathode was the printing on the container containing the light showing to be cold cathode. But such printing was not supported by any technical literature accompanying the goods. Therefore Customs opined that life of the goods was that of hot cathode but not cold cathode.

6.2 According to Customs, the catalogue for the product, showed that the goods were described as "Ready to use complete set; Round Fixture, Innova lamp & electronic ballast with GUS5.3 Lamp holder. The lights were subject to option of either "with" or "without fixture; indicating that round fixture was not an essential part of the goods imported. Such feature negated plea of the appellant that fixture is an essential part of the product for which the goods were to be classified as a Spot Light. Revenue accordingly opined that goods imported were CFL in view of the description of the goods in catalogue as under:-
7W Blister

Fixture Finish 2700K 6400K 2700K 6400K
Silver LUHOC43107664 LUHOC43107664 LUHOC46111364 LUHOC46111664
White XX XX LUHOC44111364 LUHOC44111664
Without Fixture XX XX LUHOC43111364 LUHOC43111664


7. Examining the allegations in Show Cause Notice, reply filed by the appellant and also testing evidence on record, learned Adjudicating Authority framed following main issue for decision :-
"Whether the goods under import vide Bill of Entry No. 272400 dated 11-3-2006, Bill of Entry No. 272437 dated 11-3-2006 and Bill of Entry No. 282078 dated 22-3-2006 are to be classified under chapter 85 or chapter 94."


8. Following the chapter note of chapter 94 it was observed by learned Adjudicating Authority that according to chapter note I (f) lamps or lighting fit-tings of Chapter 85 are not covered by chapter 94. According to learned Authority below, the goods imported by appellant were liable to be classified under chapter 85 but not under chapter 94 since tariff entry 94051090 deals with spotlights and the goods imported were not spot light, consequently following consequences arose in adjudication :-

(1) 11200 Nos. 'Lighting fitting Compact Recessed Downlights Innova 11-6400K-GU5.3 with 'Electronic Ballast' valued at Rs. 1079,203.22 imported vide B/E No. 272400 dated 11-3-2006 and 4800 Nos. 'Lighting fitting Compact Recessed Downlights lnnova-7 Spotlight 6400-GU5.3 with 'Electronic Ballast' valued at Rs. 4,62,515.66 and 'Lighting fitting Cimpact Recessed Downlights Innova 11-6400K-GU5.3 with 'Electronic Ballast' valued at Rs. 8,37,984.84 and 441 Nos. Spare Unit Lamps for Innova-11 valued at Rs. 13,130.05 imported vide B/E No. 272437 dated 11-3-2006 and 'Lighting fitting Compact Recessed down lights Innova 11-6400K-GU5.3 with electronic Ballast' valued at Rs. 12,66,721/- imported vide Bill of Entry No. 282078 dated 22-3-2006 were to be classified under Tariff heading 853931.

(2) Duty of Rs. 10,59,011/- was imposed on goods cleared under Bill of Entry No. 272400 dated 11-3-2006, Bill of Entry No. 272437 dated 11-3-2006 and Bill of Entry No. 282078 dated 22-3-2006.

(3) No confiscation was ordered under section 111 nor penalty under section 112 was imposed on the appellant.

9.1 Assailing order of adjudication it was submitted on behalf of the appellant that the goods imported was not merely fluorescent lamp but it was a light fitting being attached with aluminium cover round fixture innova lamp & electronic ballast. The goods with such character is entitled to be classified under CTH 9405 1090. Revenues claim that the goods is covered by CTH 8539 3110 is devoid of merit on the reason that the said entry covers fluorescent lamp only and no attachment. Therefore, the goods imported by the appellant being with an attachment not classifiable under CTH 8539 3110.

9.2 It was further submission of the appellant that the goods imported by the appellant was not sold as lamp since that cannot be placed in holder to light. The report of Phonix Lamp Ltd. relied upon by the adjudication authority in para 94 of its order .indicates that aluminium cover fitted to the lamp is for light reflection and focusing proving the goods to be spot light and not a mere lamp. Therefore, goods of such feature is covered by CTH 9405 1090. Ld. Adjudicating authority made an haphazard enquiry to reach to the erroneous classification to suit to his need even though imported goods are classifiable rightly under CTH 94u5 4010 as has been held by Tribunal in the case of Leader Electricals v. CC reported in 2005(08)LCX0087 Eq 2006 (193) ELT 0364 (Tit). Therefore he should not have gone beyond that settled position of law.

9.3 It was also submitted on behalf of appellant that the parts of C.F.L. alongwith electronic ballast should be classified under CTH 9405 1090. The classification which is more specific that should be adopted instead the class dealing with generalized goods ignoring the essential character and functional test to be applied for appropriate classification. In the case of any doubt, the class which is more particularly attracts the goods to its field should be preferred. The HSN Explanatory Note under heading 9405 covers electrical lamps and lighting fittings, which may be equipped with lamp-holders, switches, flex and plugs, transformers etc, or as in case of fluorescents srip fixures, a starter or a ballast. C.B.E. & C. in Order No. 5/93 issued vide F. No. 13/1-1993 CX-1, dated 20th September, 1993 adopted the HSN Explanatory Note to bring the goods of the appellant into the class of 9405. Order under Section 37B of Central Excise Act, 1944 was issued stating that similar fitting like tube lights be classified under Heading 9405. The logic of the Board's instruction is applicable from the character of the goods imported by the appellant possess.

9.4 According to appellant the relevant part of order under Section 37B reads as under :-

"The Board has examined the classification of tube light fitting with rotors. It is seen that the HSN as per page 1581 has stated that 9405 covers "electrical lamps and lighting fittings which may be equipped with lamp-holders, switches, flex and plugs, transformers, etc. or, as in the case of fluorescent strip fixtures, a starter or a ballast."

9.5 In view of above order u/s 37B of Central Excise Act, 1944 the goods imported by the appellant do not skip and the light fittings equipped with lamp holders submit to the class of CTH 9405. Keeping in view, such fact, Board was of the view that the product imported by the appellant is classifiable under Heading 9405.

9.6 Ld. Counsel for the appellant further argued that Ld. Adjudicating authority ignored the submissions made by the appellant which were issue based. That has violated principles of natural justice. He has acted to the detriment of justice choosing a way to interpret the Customs Tariff Heading (CTH) in a manner not acceptable to law. He did not act fairly and justly, ignoring the basic rule of classification and failing to follow the decision of the Tribunal aforesaid.

10.1 Per-contra, Revenue supports the adjudication order submitting that Id. authority by an elaborate exercise discussed the nature of the goods and also character of the goods alongwith functional test thereof. He framed the is-sues in para 89 of the order and examined the issues in the light of the report of the National Physical Laboratory and M/s. Phoenix Lamps Ltd. in Para 92 of the order. He found out the lamps imported by appellant were "hot cathode lamps" while that was mis-declared by the appellant as "cold cathode lamp".

10.2 According to Revenue, the testing laboratory report remained un-assailed by appellant. When the authority examined life span of the bulbs, he found that the "hot cathode lamps" has a filament inside the lamp which is absent in "cold cathode lamp". Both types of lamps are CFL only. Because of the long life span of the "cold cathode lamp" that is distinct goods. The CFL imported by the appellant had a short life "hot cathode lamp". Therefore by such characteristics the goods imported by the appellant was to be classified under the CTH 8539.

10.3 Ld. Authority thoroughly examined technicalities of the goods in Para 100 to Para 104 of the order. He has also examined Chapter Note under Chapter heading 94 making clear that the lamp covered by Chapter 85 are ex-cluded from the purview of Chapter 94. When Revenue examined the test report and the result of functional test revealed that the goods imported were liable to be classified under Chapter 85, that was excluded from Chapter 94 and rightly classified under Chapter 85.

10.4 Further, the reason stated by the adjudicating authority was that appellant was claiming the benefit of classification under Chapter 94 to evade anti-dumping duty, since the goods falling under that chapter were liable to such duty. This aspect was examined by ld. authority in Para 118 of his order. He found out that anti-dumping and additional customs duty evaded by the appel-lant was recoverable in terms of the table given in Para 119 of the order.

10.5 On the aforesaid grounds, Revenue's prayer was to dismiss the appeal of the appellant.


11. Heard both sides and also perused the record.


12. Perusal of the copies of Bill of Entry available at page 29 of the Appeal folder describes the goods as "Lighting Fitting Compact Recessed Down Lights Innova 11-6400K-GU5.3 with Electronic Ballast". Claim of the appellant was that the goods of such description falls under the heading "94051090". The said heading reads as under :-
CTH 8539

8539 8539 10 00
8539 21 Electric filament or discharge lamps, including sealed beam lamp units and ultra-violet or infrared lamps; arc- lamps
- Other filament lamps, excluding ultra-violet or infra-red lamps:
- Tungsten halogen :
- Other : u 10%
8539 21 10 8539 21 20 - Miniature halogen lamps with fittings u
u 10% 10%






8539 21 90 8539 22 00
8539 29 8539 29 10
8539 29 20 8539 29 30 8539 29 40 8539 29 90
8539 31 8539 31 10

Other
Other, of a power not exceeding 200 N and for a voltage exceeding 100 V
Other:
Of retail sale price not exceeding rupees 20 per bulb
Bulb, for torches
Miniature bulbs
Other for automobile lamps
Other
Discharge lamps, other than ultra-violet lamps
Fluorescent, hot cathode :
Compact fluorescent lamps...

10% 10%
10%
10% 10% 10% 10%
10%

13. The rivalry entry claimed by Revenue is that the goods falls under the CTH "85393110", which reads as under:-

CTH 9405
9405 Lamps and lighting fittings including searchlights and spotlights and parts thereof, not elsewhere specified or included; illuminated signs, illuminated name-plates and the like, having a permanently fixed light source, and parts thereof not elsewhere specified or included
9405 10 Chandeliers and other electric ceiling or wall lighting fittings, excluding those of a king used for lighting public open spaces or through fares : u 10%
9405 10 10 - Hanging lamps, complete fittings u 10%
9405 10 20 Wall lamps u 10%
9405 10 90 - Other U 10%
14. It is the observation of the Id. Adjudicating Authority that the laboratory reports proved the goods to be CFL, i.e., Compact Fluorescent Lamp by their character, nature and longevity. His observations were reiterated by Revenue in their arguments in Para 10 aforesaid. Appellant says that the goods being used for light reflection and focusing that proves the goods were spot lights but not mere lamps. But there was no contradiction to the outcome of the laboratory report by the appellant. According to Id. Adjudicating Authority, those were Hot Cathode Lamp by their longevity. The appellant did not rebut such aspect of the finding of Id. Adjudicating Authority. This characteristic of the goods brought that to the fold of CTH 8539 31 10.


15. In the course of hearing to resolve the dispute, Revenue was directed to take a sample produced by the appellant to the market to find out what is the understanding about the goods by market in common parlance. The report that came up from market enquiry revealed that the imported bulbs are known as Compact Fluorescent Lamp Spot Light which is used for ceiling light purpose. This was the view of M/s. Kalra Electrical, Shop No. 10, Saat Manjil, SD Market, Tilak Nagar, New Delhi. The second shop named M/s. Frontier Electrical, Shop No.17, S.D. Mandir Market, Tilak Nagar, New Delhi also stated in the same manner. Both of them opined that the sample goods are sold as spot light and the same is also used for ceiling light purpose. They did not rule out the goods im-ported to be CFL, i.e., Compact Fluorescent Light. Their version also agreed with laboratory report which was considered by Ld. Adjudicating Authority while passing the impugned order.


16. The classification under both the entries above show that the goods covered by them are illuminating lamp. The goods imported has the characteristic of spreading light to a defined area according to its beams and rays and the reflector used. The HSN classification speaks that searching lights are used for anti-aircraft operations and spot lights are used for stage sets and in photographic or film studios. Search lights and sport lights throw a concentrated beam of light (which can be regulated) over a distance onto a given point of surface by means of reflector and lenses or with reflector only. This is, precisely, the usage of the search light and spot light. But the goods imported by the appellant was not able to satisfy such usage except spreading its light as CFL.


17. Law is well settled in respect of classification. More specific tariff heading attracts goods akin to its entry but not an orphan to its fold compared to a non-specific tariff entry. The CTH 8539 31 10 covers Compact Fluorescent Lamp within its fold belonging to the family of electrical filament or discharge lamp including sealed beam lamp units and ultra-violet or infra-red lamps; arc-lamps. CTH 9405 describes its family as family of lamp and light fittings which covers search lights and spot lights. The goods imported neither being search light nor spot light according to HSN notes those are covered by CTH 8539 but not by CTH 9405 since both entries are altogether different and neither dear nor near to each other in relation.


18. Tribunal in the case of Leader Electricals Pvt. Ltd. v. CC, Mumbai [2005(08)LCX0087 Eq 2006 (193) ELT 0364 (Tri.-Mumbai)] has held the goods of the character imported by the appellant belong to the family of CTH 8504 with the characteristic depicted in para 2 of the order of the Tribunal, which reads as under :-

"2. We have heard both sides. The question to be determined is whether the goods are Electronic Ballast classifiable under Heading claimed by the importers, namely Customs Tariff Heading 85.04 or are lamp fittings classifiable under Customs Tariff Heading 94.05. We find that the goods were examined and found to be in the nature of lamp holder for fixing of the lamp by twisting to lamp holder of ordinary bulbs along with an adapter, at the other end for holding Compact Fluorescent Lamp and is stated to be containing a ballast inside. It is not denied that there is ballast fitted inside the article imported. However, the article imported, as examined, has been found to be a composite article comprising lamp holder, ballast and adapter. Reliance placed by the Ld. Counsel for the appellants on the report of the Regional Testing Centre of the Ministry of Industry does not advance their case for the reason that the construction of the item presented for testing was found to be built in electronic ballast housed in a suitable enclosure with wires connected and is protected by fixing a moulded part to hold suitable Compact Fluorescent Lamp. This clearly shows that the goods are not electronic lamps per se but something more, namely lamp fitting containing electronic ballast. Therefore, the classification adopted by the authority below which is in conformity with the HSN Explanatory Notes is required to be upheld. We therefore uphold the impugned order and reject the appeal." [Emphasis supplied]


19. Ld. Adjudicating Authority has stated in his order clearly that the fiction of classification under CTH 94051090 was created by the appellant to get rid of the Anti Dumping Duty. He described his logical reason in para 118 of the order and computed the duty liability in para 119 thereof precisely. His self-explanatory order speaks his application of mind and elaborate exercise made to understand different issues he framed in para 89 of the order. He has not casually passed the order without understanding the intricacies of classification. He has taken the help of the laboratory reports and also taking the technical characteristic and usage as well the life of the bulbs imported into consideration passed appropriate order. He also discarded the plea of applicability of order issued by Board under Section 37B of Central Excise Act, 1944, which relates to tube light. Adjudication order do not suffer from any legal infirmity.

20. For all the reasons stated above, appeal is dismissed.
(Pronounced in the open Court on 22-7-2014)

Equivalent 2014 (309) ELT 0112 (Tri. - Del.)