Collector of Central Excise, Bangalore vs Priya Raja Enterprises>1997(05)LCX0093

1997(05)LCX0093

IN THE CEGAT, COURT NO. II, NEW DELHI

S/Shri Lajja Ram, Member (T) and S.S. Kang, Member (J)

COLLECTOR OF CENTRAL EXCISE, BANGALORE

Versus

PRIYA RAJA ENTERPRISES

Final Order No. E/949/97-B, dated 1-5-1997 in Appeal No. E/918/89-B1.

Advocated By : Shri A.K. Agarwal, SDR, for the Appellant.

Shri K. Parmeswaran, Advocate, for the Respondents.

[Order per : Lajja Ram, Member (T)]. - In this appeal filed by the Revenue, the matter relates to the classification of the Printed Circuit Assemblies used as components of Telephone Equipment. The Assistant Collector of Central Excise, Bangalore, has classified these Printed Circuit Assemblies under Heading No. 85.17 which covered “Electrical Apparatus for the telephony or line telephony, including such apparatus for carrier-current line systems”. The classification under this Heading was made on the basis that the printed circuit assemblies were a part of the goods classifiable under Heading No. 85.17 and that the printed circuit assemblies were a part of the goods classifiable under Heading No. 85.17 and that the parts were also classifiable along with the apparatus of which they were part. On appeal, the Collector of Central Excise (Appeals), Madras held that the goods in question were correctly classifiable under Heading No. 85.42 which covered “Electronic integrated circuits and micro assemblies”. In appeal, the Revenue had contended that as the goods in question were components of telephone equipment, they were correctly classifiable under the Heading which covered the telephone equipment and that is Heading No. 85.17.

2. We have heard Shri A.K. Agarwal, SDR for the Revenue and Shri K. Parmeswaran, Advocate for the respondents, M/s. Priya Raja Enterprises, Bangalore.

3. The learned SDR referred to the Harmonised System of Nomenclature and stated that the printed circuit assemblies were exclusively used in the telephone equipment and their classification had to be with the telephone equipment. The goods were not printed circuits but they were finished circuit assemblies which consisted of various active and passive components and were ready for use in the electrical apparatus for line telephony.

4. In reply, the learned Advocate submitted that the goods in question were micro-assemblies, and referred to the grounds of appeal where the goods have been correctly described. The description had been summarised by the Collector of Central Excise (Appeals) in para-3 of his order. He submitted that in view of the Section and Chapter Notes, the classification under Heading No. 85.41 and 85.42 had to be first eliminated before considering classification under Heading No. 85.17. He pleaded that the view taken by the Collector of Central Excise (Appeals) was correct and the same needs to be confirmed.

5. We have carefully considered the matter. The competing Tariff Entries has already been extracted above. Under Chapter Note-5 to Chapter 85 of the Tariff, electronic integrated circuit and micro assemblies for the purpose of Heading No. 85.42 have been described as under :-

5. For the purposes of Heading Nos. 85.41 and 85.42 :

(a) “Diodes, transistors and similar semi-conductor devices” are semi-conductor devices the operation of which depends on variations in resistivity on the application of an electric field;

(b) “Electronic integrated circuits and microassemblies” are :

(i) Monolithic integrated circuits in which the circuit elements (diodes, transistors, resistors, capacitors, interconnections, etc.) are created in the mass (essentially) and on the surface of a semi-conductor material (doped silicon, for example) and are inseparably associated;

(ii) Hybrid integrated circuits in which passive elements (resistors, capacitors, interconnections, etc.), obtained by thin or thick-film technology, and active elements (diodes, transistors, monolithic integrated circuits, etc.), obtained by semi-conductor technology, are combined to all intents and purposes indivisibly, on a single insulating substrate (glass, ceramic, etc.). These circuits may also include discrete components;

(iii) Microassemblies of the moulded module, micromodule or similar types, consisting of discrete, active or both active and passive components which are combined and interconnected.

For the classification of the articles defined in this Note, heading Nos. 85.41 and 85.42 shall take precedence over any other heading in the Schedule which might cover them by reference to, in particular, their function.

6. Records, tapes and other media of Heading No. 85.23 or 85.24 remain classified in those headings, whether or not they are cleared with the apparatus for which they are intended.

It is also seen that for the classification of the various articles defined in Notes under Chapter 85 Heading No. 85.41 and Heading No. 85.42 had to get preference over any Heading in the Schedule which might cover them, by reference to, in particular, their function. The description of the goods in question had been summarised based on the grounds of appeal in para-3 of the Order-in-Appeal. It has been described that the goods were in a modular form and consisted of discrete components both active and passive components.

6. Under Section Note-2 under Section XVI of the parts which were goods included in any of the headings of Chapter 84 or 85 (other than Heading Nos. 84.85 and 85.48) are in all cases to be classified in their respective headings. As Electronic integrated circuits and micro-assemblies are specifically included in Heading No. 85.42, their classification under Heading No. 85.17 had to be considered only when they are not otherwise classifiable under this subsequent Heading No. 85.42.

7. The Collector of Central Excise (Appeals) after referring to the Harmonised System of Nomenclature and the relevant entries had observed that the Printed Circuit Assemblies did not answer for any of the apparatus mentioned under Telephony apparatus.

8. After taking note of the section and Chapter Notes and the description of the goods, which had not been contested by the Revenue, we find that the view taken by the learned Collector of Central Excise (Appeals), Madras does not suffer from any infirmity and does not call for any change. As a result, the appeal filed by the Revenue is rejected. Ordered accordingly.

Equivalent 1997 (94) ELT 421 (Tribunal)

Equivalent 1997 (022) RLT 0021 (CEGAT)