2023 (10) TMI 363 - AT - Customs

Customs duty concession applies to goods under Chapter sub-heading 39199090, excluding parts for mobile phones.

FORD INDIA PRIVATE LIMITED Versus Commissioner of Customs, Jamnagar (Prev.)

FORD INDIA PRIVATE LIMITED Versus Commissioner of Customs, Jamnagar (Prev.) - TMI ISSUES PRESENTED AND CONSIDERED 1. Whether goods described as 'Transfer Door Color Strip' and 'Transfer Rear Door Color Strip' classifiable under Customs Tariff Heading (CTH) 3919 90 90 are entitled to the concessional rate of basic customs duty prescribed by Notification No. 57/2017-Cus (as amended). 2. Whether the concessional entry in Serial No. 9 of Notification No. 57/2017-Cus (as amended) is limited to goods intended for use in cellular mobile phones and other electronic goods, or whether it applies to all goods classifiable under 3919 90 90 except the specifically excluded items listed in that serial entry. ISSUE-WISE DETAILED ANALYSIS Issue 1 - Entitlement of the subject goods (Transfer Door Color Strip and Transfer Rear Door Color Strip) under Notification No. 57/2017-Cus (as amended) Legal framework: Customs Tariff classification under Chapter 39 (3919) and the concessional basic customs duty rates prescribed by Notification No. 57/2017-Cus dated 30.06.2017 as amended (Notification), specifically Serial No. 9 referring to sub-heading 3919 90 90. Precedent Treatment: No judicial precedent or prior authority was cited or applied in the court's reasoning; decision rests on statutory/textual interpretation of the tariff and notification entries. Interpretation and reasoning: The Tribunal accepted that classification under CTH 3919 90 90 was common ground and not disputed by the Revenue. The textual content of Serial No. 9 of the Notification was examined: the entry grants a concessional rate for '3919 90 90 - All goods other than the following parts or sub-parts or accessories of cellular mobile phones, namely: (i) ... (v) ...' The Tribunal reasoned that the entry operates by reference to the tariff sub-heading and excludes only the enumerated items, and does not, by its wording, limit the concessional rate to goods 'meant to be used with' cellular phones or electronic goods generally. The Tribunal found no language in the Notification restricting the benefit to particular end-uses (e.g., mobile phones); instead, the scope is governed by tariff classification subject to the listed exceptions. Ratio vs. Obiter: Ratio - The entitlement to the concessional rate under Serial No. 9 turns on classification under 3919 90 90 and exclusion only of the specifically listed items; applying the Notification as worded entitles goods under that sub-heading (other than the listed exclusions) to the concessional rate. Obiter - Remarks describing the denial by lower authorities as 'without any logic and arbitrary' are explanatory observations supporting the conclusion but not separate legal holdings. Conclusions: The Tribunal concluded that the subject goods, being classifiable under 3919 90 90 and not being any of the specifically excluded items listed in Serial No. 9, are entitled to the concessional basic customs duty rate prescribed by the Notification. The orders denying the benefit were set aside. Issue 2 - Proper scope of Serial No. 9 of Notification No. 57/2017-Cus: whether limited by intended end-use Legal framework: Principles of statutory and tariff-notification interpretation (textual construction of tariff and notification entries), and the structure of tariff schedules where headings/sub-headings and notification entries operate together to determine duty rates. Precedent Treatment: No precedent invoked or applied; the Tribunal determined the question on textual and structural reading of the Notification and tariff entries. Interpretation and reasoning: The Tribunal performed a plain-text reading of Serial No. 9 which grants concessional rates for 'All goods' under 3919 90 90 'other than' the enumerated items. There is no limiting language in the Notification conditioning the concession on goods being 'meant to be used in manufacture of cellular mobile goods' or similar. The enumerated list is expressly confined to specific parts/sub-parts/accessories of cellular mobile phones; thus, the entry is negative (exclusionary) rather than positive (restrictive to specified end-uses). The Tribunal therefore rejected the department's position that the notification's benefit is confined to goods used in mobile/electronic products and held that such a restrictive interpretation is inconsistent with the Notification's wording. Ratio vs. Obiter: Ratio - The proper construction of Serial No. 9 is that the concession applies to all goods falling under 3919 90 90 except for the listed cellular-phone-related items; any interpretation limiting the concession by end-use beyond the express exclusions is incorrect. Obiter - Critical characterization of the lower authorities' denial as arbitrary is incidental to the main interpretive holding. Conclusions: The Tribunal held that Serial No. 9 is not confined to goods intended for use in cellular phones or other electronic goods; instead, it applies to all goods within 3919 90 90 except the specifically enumerated exclusions. Consequently, goods used in automobiles (such as the subject 'Transfer Door Color Strip' items) that are classifiable under 3919 90 90 qualify for the concessional rate. Cross-reference The conclusion on Issue 2 directly determines Issue 1: because the Notification's scope is defined by tariff classification with limited exclusions, the admitted classification of the subject goods under 3919 90 90 (see Issue 1) brings them within the concessional entry (see Issue 2), necessitating setting aside of the adverse orders. Relief/Disposition The Tribunal allowed the appeals, set aside the impugned orders, and directed that the subject goods, being classifiable under 3919 90 90 and not falling within the enumerated exclusions, are entitled to the concessional basic customs duty rate under Notification No. 57/2017-Cus (as amended).