Principal Commissioner Vs Havells India Ltd. (CESTAT Delhi)
Conclusion: MCPCBs imported by Havells India Ltd. should be classified under CTH 85340000 as LED components, rejecting the customs department’s claim that they fall under CTH 94054090 as independent lighting fixtures as Chapter 85 covered printed circuit boards, including those with metal cores, and that Chapter 94 applied only to finished lighting products. MCPCBs require further assembly before they become functional lighting devices, so they could not be classified under CTH 94054090.
Held: Assessee-company had imported MCPCB 6349 Prideplus New 20W 5.8X1127 MM (CELZLX0760) for use in LED lamps and classified the goods under CTH 85340000, which attracted a NIL basic customs duty under Notification No. 24/2005. The Customs Department acting on intelligence inputs examined the consignment and alleged misclassification. Revenue argued that the goods were more appropriately classified under CTH 94054090, which applied to lighting fixtures and LED lights, and issued a show cause notice demanding differential duty of Rs. 6,83,995, along with interest and penalties. Adjudicating Authority upheld the department’s view, reclassifying the goods under CTH 94054090 and confirming the demand. It also imposed a penalty of Rs. 6,83,995 and ordered confiscation with an option to redeem the goods on payment of a fine of Rs. 2,00,000. Aggrieved by this decision, assessee appealed to Commissioner of Customs (Appeals), who ruled in its favor, restoring the original classification under CTH 85340000 and setting aside the penalty and confiscation order. Revenue dissatisfied with this decision, filed an appeal before CESTAT. Revenue relied on IGST Notification No. 1/2017-IT (Rate) dated 28.06.2017, which distinguished between regular PCBs (CTH 8534) and MCPCBs (CTH 9405), contending that MCPCBs, due to their heat dissipation properties, were specifically designed for LED applications. Assessee did not appear before the tribunal, nor did it file any arguments or objections. It was held that classification under customs law could not be determined solely based on GST notifications and that the primary determining factor was the Customs Tariff Act, 1975. Tribunal observed that the issue had already been adjudicated in favor of importers in similar cases like Crompton Greaves Consumer Electricals Ltd. v. Commissioner of Customs (NS-V) and Halonix Technologies Pvt. Ltd. v. Commissioner of Customs (NS-V), where MCPCBs were held to be classifiable under CTH 85340000. Therefore, MCPCBs were components used in LED lamps but were not independent lighting fixtures themselves. Tribunal explained that Chapter 85 covered printed circuit boards, including those with metal cores, and that Chapter 94 applied only to finished lighting products. MCPCBs require further assembly before they become functional lighting devices, so they could not be classified under CTH 94054090.
