Competition Team Technology (India) Pvt. Ltd. Vs Commissioner of Customs (CESTAT Chennai)
The issue is with regard to the classification of LCD panels and parts of LCD panels. The Department contends that both these items would fall under CTH 8529 9090 whereas the appellant contends that LCD panels would fall under CTH 9013 8010 and parts of LCD panels would fall under CTH 9013 9010. Learned Counsel for the appellant has taken us through the Customs Tariff with regard to classification of these items.
One of the main contentions put forward by the Department is that prior to the amendment Notification No. 92/2017-Cus. dated 14.12.2017, the appellants were classifying the goods under CTH 8529. In the amendment Notification No. 92/2017, the Basic Customs Duty of goods falling under CTH 8529 was enhanced to 7.5% and goods that fall under CTH 9013 enjoy nil rate of duty; the appellants could not have changed the classification to enjoy the benefit of the Notification. This argument of the Department has been countered by the Learned Counsel for the appellant stating that there is no estoppel in taxation.
Held by CESTAT
We are of the considered opinion that LCD panels are classifiable under CTH 9013 8010 and parts of LCD panels are classifiable under CTH 9013 9010. We do not find any reason to deviate from the ratio laid down in the decisions relied by the Learned Counsel for the appellant. As we hold the classifications to be under CTH 9013 8010 and CTH 9013 9010, the denial of exemption benefit to the appellant as per amendment Notification No. 92/2017-Cus. dated 14.12.2017 is without any factual or legal basis and requires to be set aside, which we hereby do.
FULL TEXT OF THE CESTAT JUDGEMENT
The issue involved in both these appeals being the same, they were heard together and are disposed of by this common order.
2. The issue relates to classification of LCD panels and parts of LCD panels. In Customs Appeal No. 40017 of 2019, the issue is with regard to the classification of LCD panels and the period of dispute is from January 2018 to February 2018. In Customs Appeal No. 40463 of 2020, the issue is with regard to classification of parts of LCD panels and the period of dispute is from February 2018 to February 2019.
3.1 On behalf of the appellant, Learned Counsel Shri R. Parthasarathy appeared and argued the matter. His submissions can be summarized as under :
(i) The appellant has been importing LCD panels for the period prior to February 2018. Subsequently, the appellant started manufacturing LCD panels also at their factory and accordingly imported parts of LCD panels for manufacture of LCD panels, which are ultimately used in the manufacture of television sets.
(ii) Under the Customs Tariff, Chapter Heading 8528 covers television reception apparatus (also known as TV sets) and Chapter Heading 8529 covers parts which are suitable for use solely or principally with the said TV sets. On the other hand, Chapter Heading 9013, inter alia, specifically covers Liquid Crystal Devices (LCDs). While Tariff Item 9013 8010 covers LCDs, Tariff Item 9013 9010 covers parts of LCDs.
(iii) The issue of classification of the LCD panels imported by the manufacturers of television sets was subject matter of dispute in the past. While various importers were seeking assessment under CTH 9013, which is applicable to LCD devices, the Department was insisting on classification under CTH 8529, which covers parts of television sets. Though the Tribunal upheld the classification under CTH 9013 in the case of M/s. Videocon Indus. Ltd. v. Commr. of C.Ex. & Cus., Aurangabad [2014 (314) E.L.T. 708 (Tri. – Mum.)] and other cases, the Department was insisting on classification under CTH 8529, as they had filed an appeal before the Hon‟ble Supreme Court.
(iv) For the period till 13.12.2017, the effective rate of duty for goods falling under both CTH 8529 and CTH 9013 was the same and hence, the appellant was initially classifying the panels under CTH 8529 to avoid any dispute. However, with the imposition of higher Customs duties on goods falling under CTH 8529 with effect from 14.12.2017, the appellant claimed classification under Tariff Item 9013 8010 vide their letter dated 05.01.2018 to the Adjudicating Authority. However, this was rejected by the Adjudicating Authority. Similarly, for import of parts of LCD panels, the appellant claimed classification under Tariff Item 9013 9010, which covers parts of LCD devices of Heading 9013.
(v) The Department is of the view that CTH 9013 does not cover articles used for manufacturing televisions. The impugned goods are meant specifically for the manufacture of LCD/LED Televisions and LCD Televisions are classifiable under CTH 8528 72 18 and CTH 8528 73 10. The parts thereof are to be classified under CTH 8529.
3.2 Learned Counsel for the appellant submits that the LCD panels are correctly classifiable under Tariff Item 9013 8010 and parts thereof are classifiable under Tariff Item 9013 9010 for the following reasons :
