Supreme Court: In a batch of civil appeals filed by Commissioner of Central Excise (“CCE”). against the order passed by the Customs, Excise and Service Tax Appellate Tribunal (“CESTAT”), wherein the imported liquid crystal device (“LCD”) panels were held to be classified under Chapter Heading (“CH”) 9013.8010 of the first schedule of Customs Tariff Act, 1975 (‘CTA’), the Division Bench of S. Ravindra Bhat* and Dipankar Datta, JJ., praised the classification by the CESTAT and dismissed the appeals.
In the matter at hand, CCE had challenged two orders of CESTAT, in the first appeal, the assessee is Videocon International (“videocon”) and in second appeal the assessee is Harman International India Pvt. Ltd. (“harman”), in both the appeals CCE was aggrieved by the order classifying LCD panels under CH 9013.8010 of CTA.
The Court referred to “General Rules of Interpretation” of the first schedule of CTA and said that Rules 1, 2 and 3 and Chapter 85 along with Chapter 90 in Section XVI are relevant to determine the classification of the product in question i.e., LCD panels. Further, it evidentially said that:-
(a) “classification must be in accord with “the terms of the headings and any relative Section or Chapter Notes” (Note 1);
(b) reference in a heading to “an article” includes “that article incomplete or unfinished” provided, such incomplete or unfinished article has “the essential character of the complete or finished article.” (Note 2(a));
(c) if on an application of Rule 2(a), an article is classifiable in more than one heading “the heading which provides the most specific description shall be preferred to headings providing a more general description.” (Note 3 (a))”.
The Court said that Note 1(m) in Chapter 85 excludes the application of articles falling in Chapter 90, thus the classification of the goods on basis of principal or sole use in Note 2(b) to Chapter 85-is insubstantial. Therefore, when goods are excluded from a particular chapter, the “pull in” through a note must be narrowly construed, as otherwise, the basis of exclusion would be defeated, and the earlier note (of exclusion) would be rendered redundant.
The Court stated that keeping in mind the nature of the product in question, the goods are liquid crystal device, they are specifically covered by the entry heading CH9013.8010, which reads as “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”.
The Court accepted the contentions of the counsel for videocon, and relying on Secure Meters Ltd. v. Commr. of Customs, (2015) 14 SCC 239 said that “Secure Meters is decisive on the question that LCDs are ‘not articles’ provided “more specifically in other heading”, i.e., other than 9013.8010”. Thus, the CESTAT’s reasoning and conclusions, in both the cases, that LCD sets were under CH-90, entry 9013.8010 are sound and unexceptionable.
Thus, the Court dismissed the appeals. [CCE v. Videocon Industries Ltd., 2023 SCC OnLine SC 357, decided on 29-03-2023]
*Judgment Authored by: Justice S. Ravindra Bhat
