2023(06)LCX0226(AAR)

India Japan Lighting Private Limited

decided on 08-06-2023

Office of Customs Authority for Advance Rulings,
Mumbai, 1^st Floor, New Custom House, Ballard Estate, MUMBAI -
400 001, cus-advrulings.mum@gov.in

Advance Ruling

 1. This copy is granted free of charge for the private use of the person to whom it is issued.

2.Any officer authorised by the Board, by notification or the applicant may file an appeal to the High Court against any ruling or order passed by the Authority, within 60 days from the date of the communication of such ruling or order. Provided that where the High Court is satisfied that the appellant was prevented by sufficient cause from presenting the appeal within the period so specified, it may allow a further period of 30 days for filing such appeal as per provisions of section 28KA

3. The Principal Commissioner or Commissioner shall be authorised to file appeal against the advance ruling in terms of sub-section (1) of section 28KA.

4. An appeal against advance ruling issued under sub-section (6) of section 28-I shall be made by the applicant in form CAAR-2 and shall be accompanied by a fee of fifteen thousand rupees. An appeal against the advance ruling issued under sub-section (6) of section 28-I of shall be made by the Principal Commissioner or Commissioner in form CAAR-3 and no fee shall be payable by the said officer for filing the appeal. 

Ruling

M/s. India Japan Lighting Private Limited (hereinafter referred as ‘applicant’) has filed. the present advance ruling application. The said application dated 03.03.2023 was received in the secretariat of the CAAR, Mumbai on 10.03.2023 along with its enclosures in terms of Section 28H (1) of the Customs Act, 1962 (hereinafter referred to as the ‘Act). The applicant is stated to be engaged in the manufacture of Fog Lamps for automobile applications and has IEC No. 0496026372. The applicant intends to import “LED socket assembly” (hereinafter referred to as the ‘subject goods’) for the manufacture of Front Fog Lamp for automobile applications. The applicant is seeking advance ruling on the classification of subject goods.

2. The applicant submitted that they propose to import the part described as ‘LED Socket Plug Assembly’ from Koito Manufacturing Co. Ltd., Japan under the Free Trade Agreement that India has with Japan. The product under reference has LEDs, LED Circuit and all these assembled in a fixture. Photographic representation of this LED socket from different angles is attached below.

Pic. I: LED Socket Plug Assembly

This LED socket will be assembled with other parts for production of front fog lamp of an automobile. When it is switched on, the whole lamp will light and provide warning/signal to other vehicles coming in from the opposite direction.

2.1 The other parts to be assembled with this LED socket to make a complete front fog lamp are Lens, Inner Lens, Holder, Filter, Adjusting Screw Assembly and Body. After procurement of other parts, the LED socket assembly imported from the above manufacturer will be assembled and a complete front fog lamp for automobiles will be produced by the applicant. A detailed view of parts of this fog lamp is reproduced below.

Pic. II: Parts for Front fog lamp

2.2 It is submitted that the part imported is basically an assembly of LED with associated circuit with a fixture. For each type of vehicle lamp, the size and type of this assembly will vary. This is to be assembled with the other parts viz. Lens, Inner Lens, Holder, Filter, Adjusting Screw Assembly and Body to produce a complete fog lamp for automobiles.

2.3 The applicant further submits that Heading 8512 of the Customs Tariff Schedule 1985 covers “electrical light or signalling equipment (excluding articles of heading 8539), windscreen wipers, defrosters and demisters of a kind used for cycles or motor vehicles”. Heading 8512 10 at six-dight level covers “Lighting or visual signalling equipment of a kind used for bicycles”. Heading 8512 20 covers “Other lighting or visual signalling equipment” under six-digit level. Heading 8512 2010 covers “Head lamps, tail lamps, stop lamps, side lamps and blinkers” and 8512 2020 covers “Other automobile lighting equipment”. Parts of these lamps and other lighting equipment are covered under “8512 9000”. The present LED socket is neither a complete lamp nor it can be used with other lighting equipment other than automobiles as it is designed solely for being used in the assembly of a fog lamp. Under such circumstances, this LED socket assembly will be a part for automobile signalling equipment covered under Heading 8512 and therefore in the applicant’s view it will be appropriately classifiable under Heading “8512 9000”.

2.4 Further, according to the applicant, in terms of Notification No. 69/2011-Cus., dated 29.7.2011 as amended (SI. No. 656) this product will be additionally eligible for Nil basic duty in terms of India – Japan Free Trade Agreement upon production of valid country of origin certificate as per the notification.

3. In their CAAR – 1 application form, the applicant has declared that they would be importing the subject goods through the port of Accordingly, comments from the jurisdictional Commissioner of Customs, Mundra Commissionerate, Gujarat were invited in respect of the application for advance ruling. However, no comments have been received from the jurisdictional Principal Commissioner/Commissioner of Customs.

4. The personal hearing in the matter was held in virtual mode on 11.05.2023 wherein S. Murugappan, advocate represented the applicant. No one was present for the department/jurisdictional commissionerates. During the course of hearing shri. Murugappan explained the CAAR-1 application, displayed the sample of LED socket and also discussed alternate CTHs 8539 and 8541. He requested time period upto 15.05.2023 for submission of additional reply/submission.

 4.1 The representative has submitted additional submission dtd 15.05.2023 on behalf of the applicant. It has been submitted that the competing classifications are 8539 5100 covering Light Emitting Diode (LED) Modules and 8541 4100 covering Light Emitting Diodes. The HSN Explanatory notes for Light Emitting Diode (LED) Modules read as follows:

“The light from these modules is produced by one or more light-emitting diodes (LED) mounted on a printed circuit board or otherwise connected. These modules do not have a cap (base) (e.g., screw, bayonet or bi-pin type) for fixing in the lamp-holder.
These modules may have electric connectors. These modules have circuity to control DC voltage and current to a level useable by the LEDs (power control). These modules may have circuitry to rectify AC power (power supply) with the power control.”

    In the present case, the applicant has confirmed that there are no control circuitries / controller in the item imported. It also has been confirmed that it does not have any cap or IC chips and cannot carry out any rectification of current.

4.2 It is submitted that heading 8541 4100 also covers light emitting diodes and as per the HSN explanatory notes, these are:

“Light-emitting diodes (LED), or electroluminescent diodes, (basal inter alia, on gallium arsenide, gallium phosphide or gallium nitride) are devices which convert electric energy into visible, infra-red or ultra-violet rays. They are used e.g., for displaying or transmitting data in control systems or for illumination and lighting applications.
Light-emitting diode (LED) assemblies
These are assemblies comprised of light-emitting diode (LED) packages mounted on a printed circuit hoard, which may include optical elements and thermal, mechanical, and electrical interfaces (e.g., electric connectors including wires to connect with external control circuitry). The LED assemblies do not have the control circuitry necessary to recta AC power and control DC current to a level usable by the LEDs.”

4.3 It is further submitted that in their case, the socket imported does have thermal element and electrical interface for dissipating heat and also for making connections to the electrical circuitry. Therefore, between 8539 and 8541, Heading 8541 will be more appropriate than 8539. It is submitted that they have claimed classification of these as parts of signalling equipment for the reason that these LED socket assemblies can solely be used as a part of anti-fog lamp assembly and it is completely unsuitable for other purposes. They also submitted the clarification received from the applicant in this connection and have requested to consider the application for the classification claimed as deemed appropriate.

5. I have gone through the application, the submissions of applicant along with records of personal hearing and other relevant information. I have also gone through the additional submission submitted after the personal hearing. The applicant intends to import ‘LED socket plug assembly’ (subject goods) for the manufacture of front fog lamp of an automobile. From the submitted information and images it appears that the subject goods are one of the parts to be used alongwith other parts in the manufacture of front fog lamp for automobiles. In absence of comments on the subject from the jurisdictional commissionerate on the impugned subject item, I proceed to pronounce ruling on the issue. The questions before me are;

(i) classification of the subject goods under the Customs Tariff Act, 1975;
(ii) applicability of a Notification No. 69/2011 dated 29.7.2011 having a bearing on the rate of duty.

    However, in view of the opinion of the applicant as to the classification of the subject goods, all the contending headings, as brought up for consideration by the applicant, needs to be examined.

5.1 Chapter Heading 8512 of Customs Tariff Act, 1975 provides for “Electrical lighting or signalling equipment (excluding articles of heading 85.39), windscreen wipers, defrosters and demisters, of a kind used for cycles or motor vehicles” and covers the following:

8512.10 Lighting or visual signalling equipment of a kind used on bicycles
8512 20 —Other lighting or visual signalling equipment
8512 20 90 —Other
8512 90 00 – Parts

     The HSN Explanatory notes provide that this heading covers electrical apparatus and appliances specialized for use on cycles or motor vehicles for lighting or signalling purposes. The heading includes Headlamps of all kinds including lamps fitted with dimming or dipping attachments; diffused driving lamps; anti fog lamps; spot lights; search lamps of a kind used on police cars or the like (including those which, attached to a length of cable, can be used as hand lamps or can be placed on the road). Further, subject to the general provisions regarding the classification of parts (see the General Explanatory Note to Section XVI), parts of the goods of this heading are also classified here.

5.1.1 The applicant submits that the subject goods i.e., ‘LED socket plug assembly’ are parts intended for the manufacture of front fog lamp of an automobile. They are basically an assembly of LED with associated circuit with a fixture and for each type of vehicle lamp, the size and type of this assembly may vary. This is to he assembled with the other parts viz. Lens, Inner Lens, Holder, Filter, Adjusting Screw Assembly and Body to produce a complete fog lamp for automobiles. As per the HSN Explanatory notes, this LED socket assembly which is a part for automobile lighting equipment i.e., anti-fog lamps and the parts of the same are also covered under Heading 8512 and therefore, appears to be appropriately classifiable under Heading “8512 9000” as parts.

5.2 Chapter Heading 8539 of CTA provides for “Electric filament or discharge lamps, including sealed beam lamp units and ultra-violet or infra-red lamps; arc-lamps; light emitting diode (LED) lamps” and among others, covers as follows:

8539.49 – – Other
                – Light-emitting diode (LED) light sources:
8539.51 – – Light-emitting diode (LED) modules
8539.52 – – Light-emitting diode (LED) lamps
8539.90 – Parts

The chapter note 11 to chapter 85 provide as:

'11.- for the purposes of heading 85.39, the expression “light-emitting diode (LED) light sources covers:
(a) “Light-emitting diode (LED) modules” which are electrical light sources based on light-emitting diodes (LED) arranged in electrical circuits and containing further elements like electrical, mechanical, thermal or optical elements. They also contain discrete active elements, discrete passive elements, or articles of heading 85.36 or 42 for the purposes of providing power supply or power control, Light-emitting diode (LED) modules do not have a cap designed to allow easy installation or replacement in a luminaire and ensure mechanical and electrical contact.
(b) “Light emitting diode (LED) lamps” which are electrical light sources containing one or more LED modules containing further elements like electrical, mechanical, thermal or optical elements. The distinction between light-emitting diode (LED) modules and light-emitting diode (LED) lamps is that lamps have a cap designed to allow easy installation or replacement in a luminaire and ensure mechanical and electrical contact.’

5.2.1 The HSN Explanatory Notes to heading 8539 further provide as:

(F) Light-Emitting Diode (LED) Modules
  The light from these modules is produced by one or more light-emitting diodes (LED) mounted on a printed circuit board or otherwise connected. These modules do not have a cap (base) (e.g. screw, bayonet or bi-pin type) for fixing in the lamp-holder. These modules may have electric connectors. These modules have circuity to control DC voltage and current to a level useable by the LEDs (power control). These modules may have circuitry to rectify AC power (power supply) with the power control.
(G) Light-Emitting Diode (LED) Lamps
   The light from these lamps is produced by one or more light-emitting diodes (LED). These lamps consist of a glass or plastic envelope, one or more light-emitting diodes (LED), circuitry to rectify AC power and to convert voltage to a level useable by the LEDs, and a base (e.g., screw, bayonet or bi-pin type) for fixing in the lamp-holder. Certain lamps may also contain a heat sink. These lamps are of various shapes, e.g., spherical (with or without a neck); pear or onion shaped; flame shaped; tubular (straight or curved); special fancy shapes for illuminations, decorations, Christmas trees, etc.

5.2.2 The applicant in the additional submission has confirmed that the item being imported has no control circuitries / controller nor does it have any cap or IC chips and thereby cannot carry out any rectification of current. Therefore, in view of the above mentioned chapter note and HSN explanatory notes the subject goods get ruled out from the ambit of Heading 8539.

5.3 The applicant in their additional submission has contended that between Heading 8539 and 8541for the subject item, a Heading 8541 will be more appropriate than 8539. However, it is seen that Chapter Heading 8541 of CTA provides for “Semiconductor devices (for example, diodes, transistors, semiconductor-based transducers); photosensitive semiconductor devices, including photovoltaic cells whether or not assembled in modules or made up into panels; light-emitting diodes (LED), whether or not assembled with other light-emitting diodes (LED); mounted piezo-electric crystals”. This heading, among others, covers as follows:

Photosensitive semiconductor devices, including photovoltaic cells whether or not assembled in modules or made up into panels; light-emitting diodes (LED):

8541.41 – Light-emitting diodes (LED)
8541.42 – Photovoltaic cells not assembled in modules or made up into panels
8541.43 – Photovoltaic cells assembled in modules or made up into panels
8541.49 – Other

5.3.1 In this context the Chapter note and HSN Explanatory notes to heading 8541 provide as follows:

(C) Light Emitting Diodes (LED)

Light-emitting diodes (LED), or electroluminescent diodes, (based, inter alia, on • gallium arsenide, gallium phosphide or gallium nitride) are devices which convert electric energy into visible, infra-red or ultra-violet rays. They are used, e.g., for displaying or transmitting data in control systems or .for illumination and lighting applications.

Laser diodes emit a coherent light beam and are used, e.g., in detecting nuclear particles, in altimetering or in telemetering equipment, in communication systems using fibre optics.

This group also includes:

(1) Light-Emitting Diode (LED) Packages

These are single electrical components encapsulating principally one or more light-emitting diode (LED) chips (dies), and possibly including optical elements and thermal, mechanical, and electrical interfaces (e.g. electric connectors including wires to connect with external control circuitry). Protective diodes (e.g. Zener diodes) may he connected anti parallel to the Gallium-nitride-based light-emitting Diode (GaN LED) chips to protect the GaN LED chips from electrostatic discharge for some of GaN LED packages. There are two basic types of white LED packages. The first type is composed of a combination of LED chip(s) and fluorescent material (phosphor). The second type of white LED packages is composed of a combination of red LED chip(s), green LED chip(s) and blue LED chip(s). White LED packages are used for general lighting and backlight applications.

(2) Light-Emitting Diode (LED) Assemblies

These are assemblies comprised of light-emitting diode (LED) packages mounted on a printed circuit board, which may include optical elements and thermal, mechanical, and electrical interfaces (e.g., electric connectors including wires to connect with external control circuitry). The LED assemblies do not have the control circuitry necessary to rectify AC power and control DC current to a level usable by the LEDs. The number of LEDs does not alter the function of the LEDs but contributes only to the intensity of the light Certain LED assemblies use LED chips instead of LED packages. The chips are mounted on a printed circuit board and encapsulated overall or individually, possibly with phosphor.

5.3.2 From the HSN Explanatory notes it is seen that Chapter Heading 8541 of CTA provides for “Semiconductor devices (for example, diodes, transistors, semiconductor-based transducers); photosensitive semiconductor devices, including photovoltaic cells whether or not assembled in modules or made up into panels; light-emitting diodes (LED), whether or not assembled with other light-emitting diodes (LED); mounted piezo-electric crystals. Whereas, it is not the case in respect of the subject goods, i.e., LED socket assembly, which as per the information provided, is merely a part for the production of anti-fog lamp for automobiles. Considering the same, the subject goods do not merit classification under Heading 8541.

6. The Central Government vide Notification No. 69/2011 dated 29.7.2011 as amended (SI. No. 656), exempts goods of the description as specified in column (3) of the Table appended hereto and falling under the Chapter, Heading, Sub-heading or tariff item of the First Schedule to the Customs Tariff Act, 1975 (51 of 1975) as specified in the corresponding entry in column (2) of the said Table, when imported into India from Japan, from so much of the duty of customs leviable thereon as is in excess of the amount calculated at the rate specified in the corresponding entry in column (4) of the aforesaid Table: Provided that the exemption shall be available only if importer proves to the satisfaction of the Deputy Commissioner of Customs or Assistant Commissioner of Customs, as the case may be, that the goods in respect of which the benefit of this exemption is claimed are of the origin of Japan, in terms of rules as may be notified in this regard by Central Government by publication in the official gazette. In respect of the question of entitlement of benefit of Notification 69/2011-Cus dated July 27, 2011, as amended, I find that the Sr. No. 656 of the impugned notification reads as follows:

7. From the CAAR-1 application and submissions of the applicant, I find that the subject goods namely “LED Socket Plug Assembly” is a combination of assembly of LED with associated circuit with a fixture for anti-fog lamp for vehicle. Further, this is required to be assembled with other parts viz. Lens, Inner Lens, Holder, Filter, Adjusting Screw Assembly and Body to produce a complete fog lamp for automobiles. CTH 8512 provides for Electrical lighting or signalling equipment of a kind used for cycles or motor vehicles. anti-fog lamps are covered under this heading. Further, by virtue of Section note 2 of the Section XVI of the schedule Ito the Customs Tariff Act, 1975 read with the general provisions regarding the classification of parts i.e., the General Explanatory Note to Section XVI of Harmonized. Commodity Description and Coding System Explanatory Notes, parts of the goods of heading 8512 are also classified under heading 8512. Therefore, I find that the subject goods merit classification under Heading “8512 90 00” as parts.

8. The second issue is whether subject goods are eligible for the benefit of duty exemption under serial no. 656 of the notification no. 69/2011-Cus. dated 29.7.2011. The entry at serial no. 656 in the said notification provides for eligibility for nil Basic Custom duty in terms of India -Japan Free Trade Agreement upon production of valid Country of Origin (COO) Certificate for all goods falling under heading 8512 90 of the Customs Tariff Act, 1975.

9. In view of the aforesaid discussions, I pronounce ruling on the issue as under: –

(i) the subject goods namely “LED socket assembly” merit classification under Heading 8512 and more appropriately under sub-heading “8512 9000” of the Customs Tariff Act, 1975;

(ii) the subject goods would be eligible for benefit of serial number 656 of notification No. 69/2011-Cus., dated 29.7.2011.

This copy is certified to be a true copy of the ruling and is sent to:

1. M/s. India Japan Lighting Private Limited No.1 Puduchatram, Via. Thirumazhisai, Thiruvellore High Road,Chennai — 600 124.
Email- rakesh@ijl.co.in smurugappan53@yahoo.com

2. Principal Commissioner of Customs Mundra, 5B, Port User Building Mundra Port, Mundra, Kutch, Gujarat-370421.
Email – commr-cusmundra@nic.in

3. The Customs Authority for Advance Rulings, O/o the Chief Commissioner of Customs, Delhi Zone, New Customs House, Near IGI Airport & Cargo Complex, New Delhi- 110037
Email: cus-advrulings.del@gov.in

4. The Principal Chief Commissioner of Customs, Mumbai Customs Zone-I, Ballard Estate, Mumbai – 400001.
Email: ccu-cusmum1@nic.in

5. The Member (Customs), Central Boards of Indirect Taxes & Customs, North Block, New Delhi-110001.
Email: mem.cus-cbec@nic.in

6. The Commissioner (Legal), CBIC Offices, Legal/CX.8A, Cell, 5^th floor, Hudco Vishala Building, C-Wing, Bhikaji Cama Place, R. K. Puram, New Delhi – 110066.
Email: anishgupta.irs@gov.in, commr.legal-cbec@nic.in

7. The Webmaster, Central Boards of Indirect Taxes & Customs.
Email: webmaster.cbec@icegate.gov.in

8. Guard file.