Arktron Electronics Vs Commissioner of Customs (Preventive) (CESTAT Delhi)
Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) in Delhi has ruled in favor of Arktron Electronics, allowing the company to avail concessional customs duty rates on imported aluminium-based copper clad laminates. These laminates are crucial inputs in the manufacture of Metal Clad Printed Circuit Boards (MCPCBs). The Tribunal’s decision, issued on May 29, 2025, sets aside an order from the Commissioner of Customs (Preventive) that had denied this benefit, demanded differential duty, and imposed penalties.
Arktron Electronics had imported the laminates through 23 Bills of Entry, claiming an exemption under Serial No. 39 of Notification No. 24/2005-Cus dated March 1, 2005. This notification provides a concessional rate of duty for “all goods used in manufacturing PCB classifiable under Customs Tariff Item (CTI) 8534 00 00,” provided certain procedural rules for concessional duty imports are followed.
The central dispute revolved around the classification of the manufactured product. Arktron Electronics contended that the MCPCBs fell under CTI 8534 00 00, thereby qualifying for the exemption. In contrast, the Customs Department argued for classification under CTI 9405 99 00, which would disallow the concessional duty benefit.
Judicial Precedents:
The CESTAT relied heavily on a series of previous judicial pronouncements that had addressed the identical issue.
1. Crompton Greaves Consumer Electricals Ltd. vs. Commissioner of Customs (NS-V) (Customs Appeal No. 86852 of 2021, decided on September 9, 2022): In this case, the Tribunal had already determined that the assessee was entitled to the exemption benefit for similar materials used in MCPCBs.
2. Crompton Greaves Consumer Electricals Ltd. vs. Commissioner of Customs, Nhava Sheva-V (Customs Appeal No. 85054 of 2022, decided on June 28, 2023): A Division Bench of the Tribunal subsequently followed the precedent set in the earlier Crompton Greaves case.
3. Commissioner of Custom vs. Crompton Greaves Consumer Electrical Ltd (Civil Appeal Diary No. 28888 of 2024, decided by the Supreme Court on November 29, 2024): Crucially, the Supreme Court dismissed the Customs Department’s appeal against the Tribunal’s decisions in the Crompton Greaves cases. The Supreme Court dismissed the appeal both on grounds of “gross delay of 312 days” in filing and “on merits,” stating there was “no good ground to interfere with the impugned order passed by the Customs, Excise & Service Tax Appellate Tribunal, Mumbai.” This dismissal by the Supreme Court, particularly on merits, served as a significant judicial affirmation.
4. Principal Commissioner of Customs, Preventive Commissionerate vs. M/s B.S. Electronics Private Limited (Customs Appeal No. 55355 of 2023, decided on April 30, 2025): Most recently, a Division Bench of the CESTAT, in this case, directly examined whether MCPCBs are indeed PCBs. The Tribunal explicitly observed that “MCPCBs are also PCBs as decided by this Tribunal in Crompton Greaves and upheld by the Supreme Court.” Furthermore, it clarified that earlier exemption notifications (like S.No. 122 of Notification No. 25/1999- Cus, prior to its amendment) also covered laminates with metal cores (including aluminium) used for manufacturing MCPCBs, thereby reaffirming the eligibility for exemption.
In light of these consistent rulings, particularly the Supreme Court’s dismissal on merits, the CESTAT concluded that the Commissioner of Customs (Preventive)’s order denying the concessional duty benefit to Arktron Electronics could not be sustained. The Tribunal set aside the impugned order and allowed Arktron Electronics’ appeal, reinforcing the principle that MCPCBs fall within the scope of PCBs for the purpose of this customs duty exemption.
