By TIOL News Service

NEW DELHI, MAY 06, 2015: THE appellant is engaged in the manufacture of electricity meters. In September 2000, the appellant imported a consignment consisting of LCD Modules (Printed Circuit Boards) and Liquid Crystal Display (LCD) from Hong Kong. The dispute in the instant case relates to classification of LCDs. The appellant sought clearance of LCDs under Chapter Heading 9013.80 and claimed assessment at Nil rate (basic duty), 16% additional duty and 4% SAD. As per the appellant, since the LCDs were classifiable under Chapter Heading 9013.80, in view of Notification No. 16/2000, and particularly Entry/ S.No . 304 of the table of the said Notification, the goods classified under Heading 9013.80 attracted Nil rate of basic custom duty.

However, the case of the respondent/custom authorities is that on verification it was found that the goods were not simple liquid crystal. On the contrary, these were LCD Modules and Elastomeric LCD Displays and were part of Energy Meter. The relevant invoices also described the goods as "electronic part for energy meter". The drawing and literature which were provided did not specify the purpose.

The Deputy Commissioner, Customs (Adjudicating Authority), passed orders dated 31.08.2001 holding that LCDs were classifiable under Chapter Heading 9028.90 and not under 9013.80 as claimed by the appellant. The aforesaid order of the Adjudicating Authority has been affirmed by the Commissioner as well as CESTAT resulting into dismissal of appeals filed by the appellant.

The Supreme Court observed,

It cannot be disputed that LCDs are specifically provided in tariff item 9013. The only condition is that such LCDs should not constitute 'articles' provided more specifically in other headings. In the present case, it is also not in dispute that LCDs imported by the appellant did not constitute any such 'article' which is more specifically provided in other headings. On the contrary, the Revenue wants to include in the same Chapter, i.e. Chapter 90, though under Entry 9028.90.10 as "parts and accessories". The only reason for including the goods under Chapter Heading 9028 is that the LCDs were to be used in the electricity supply meters. However, Entry 9028 does not pertain to LCDs but gas, liquid, etc. and includes electricity supply meters as well. Merely because these LCDs are to be used as parts in the said electricity supply meters, can it be said that they are to be included in Entry 9028? Here, Note 2 of this Chapter Notes becomes important since LCDs are used in the electricity supply meters only as parts thereof.

Held : LCDs imported by the appellant were classifiable under Chapter Heading 9013.80. The view taken by the Tribunal in the impugned judgment is unsustainable in law. The appeal is allowed and the orders of the authorities below are set aside.

(See 2015-TIOL-100-SC-CUS)