CESTAT, by its impugned order in the first appeal, allowed Videocon’s appeal and held that the LCD panels imported by it are classifiable in Chapter Heading (“CH”) 9013.8010 [of the First Schedule to the Customs Tariff Act, 1975 (hereafter “CTA”)], as Liquid Crystal Devices- as opposed to the revenue’s stand, that they are classifiable as 85.29 “parts of goods falling under heading 85.28” [television sets falling in heading 85.28].
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That entry reads as follows: “9013.8010 Liquid crystal devices (LCD)”
The Chapter Heading read as follows: “9013 Liquid crystal Devices not constituting articles provided for more specifically in other headings; Lasers, other than Laser Diodes; other optical appliances and instruments, not specified or included elsewhere in this chapter” Whereas, the revenue contended that the LCD panels were to be classified as CH 8529, which reads as follows: “Chapter 8529.
In the Harman appeal too, the assessee claimed that the imported items i.e., LCD panels [declared before the customs authorities as “Liquid Crystal Devices-TFT-LCD 4.8 in” ] for car audio assemblies, were properly classifiable in CH 9013.8010. CH 8522 reads as follows: “8522 Parts and accessories suitable for use solely or principally with the apparatus of headings 8519 or 8521” The litigation history in Harman’s case followed a trajectory similar to Videocon’s; ultimately, by the impugned order, CESTAT upheld its contention that the goods, meant for use in car audio systems, were classifiable in CH 9013.8010. Counsel submitted that the court in GS Auto (supra) referred to Notes 2(b) and (3) of Section XVII and observed that a joint reading of the notes would show that the expression “parts of general use” throughout the schedule, meant, articles of Heading No 7318 and similar articles of other base metal, and the expression ‘part and accessories’ in Chapter Heading 87.08 did not apply to parts or accessories unsuitable for use solely or primarily with articles of CH 87.08 which related to parts and accessories of motor vehicles of CH 87.01 to 87.05. It is urged that on an application of similar logic even if LCDs are covered by CH 90.13, yet, they have to be classified under heading 85.29 since these are solely or principally used for manufacture of LCD TVs and commercially known as parts of TVs. The absence of explanatory note stating the parts of LCD TVs will not be classifiable under Chapter Heading 85.29 if it is specifically specified under any other chapter heading (in this case, Chapter Heading 90.13), the assessee cannot rely on notes relating to other sections and chapters.
Bagchi, anticipating reliance- by the assessee upon the judgment of this court, in Secure Meters v Commissioner of Customs – submitted that the ratio of that case cannot be applied to the facts of this case because, firstly, the competing entries (in that case) fell within the same chapter, and secondly, that the factual basis in the present case, is stronger, because the websites of the manufacturers, clearly reveal that the imported goods were meant principally to be used in television sets. Thus, LCD panels were specifically designed in a particular manner to be used only in car audio/infotainment systems.
Goods are admittedly liquid crystal device; they are specifically covered by the entry heading 90.13 as it is not described more specifically in any other heading. The revenue does not deny that LCD panels are covered by Chapter Heading 90.13. LCDs consist of items like LCD TV, (referred to under Chapter Heading 8528.7218 and 8528.7510) and indicator panels incorporating LCDs (referred to in entry 8531.2000) and other items which are specifically provided for. A part or accessory which answers to a description in two or more of the headings of those Chapters is to be classified under that heading which corresponds to the principal se of that part of accessory.” It was argued that the section notes clearly provide that the word “parts and accessories” will not apply to parts of general use as defined in Note 2 to Section XV of base metal, and it was in view of this note that this Court held that parts which are suitable for use solely or principally with articles of Chapters 86 to 88 are to be treated as parts and accessories of articles falling under Chapter 86 to 88 in terms of Note 3. According to Section Note 2(a) of Section XVI the parts which are goods included in any of the headings of Chapter 84 or 85 are, in all cases, to be classified in their respective headings, and it is only when the parts are not classifiable as per Section Note 2(a) that Section Note 2(b) is attracted. They have multiple uses; if the revenue is correct, each such use would then be a “principal” use. Lakshmikumaran, learned counsel appearing in Harman, adopted the submissions made by Mr. Laxmikumaran is that the expression “parts and accessories” used in CH 8522 excludes articles covered under Chapter 90 of the Tariff, whether or not they are identifiable as for the goods falling under Section XVI of the Tariff and that even if any article is identifiable as a “part or/and accessories for the goods of Section XVI, it shall be excluded from the term “parts and accessories”. Rules 1, 2 and 3 are relevant and are extracted below: THE FIRST SCHEDULE—IMPORT TARIFF (See Section 2) GENERAL RULES FOR “THE INTERPRETATION OF THIS SCHEDULE Classification of goods in this Schedule shall be governed by the following principles:
1.
Any reference to goods of a given material or substance shall be taken to include a reference to goods consisting wholly or partly of such material or substance. However, when two or more headings each refer to part only of the materials or substances contained in mixed or composite goods or to part only of the items in a set put up for retail sale, those headings are to be regarded as equally specific in relation to those goods, even if one of them gives a more complete or precise description of the goods.
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 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, 8431, 8448, 8466, 8473, 8485, 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, 8448, 8466, 8473, 8503, 8522, 8529 or 8538 as appropriate. Subject to Note 1 above, parts and accessories for machines, apparatus, instruments or articles of this Chapter are to be classified according to the following rules: (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 4[8487], 8548 or 9033) are in all cases to be classified in their respective headings; (b) Other parts and accessories, if suitable for use solely or principally with a particular kind of machine, instrument or apparatus, or with a number of machines, instruments or apparatus of the same heading (including a machine, instrument or apparatus of heading 9010, 9013 or 9031) are to be classified with the machines, instruments or apparatus of that kind; (c) All other parts and accessories are to be classified in heading 9033.”
Note 1 (m) to Chapter 85 excludes “(m) Articles of Chapter 90…”
Case Title: CCE, AURANGABAD Vs. M/S VIDEOCON INDUSTRIES LTD. THR. ITS DIRECTOR (2023 INSC 313)
Case Number: C.A. No.-005622-005622 / 2009
