Customs exemption for laminates used in metal clad printed circuit boards upheld under settled Tribunal and Supreme Court-backed authority

Aluminium-based copper clad laminates imported for manufacture of metal clad printed circuit boards were treated as eligible for the concessional customs duty entry for printed circuit boards under Notification No. 24/2005-Cus. Earlier Tribunal rulings had held that metal clad printed circuit boards fall within that exemption, later decisions followed the same view, and the Supreme Court left the Department's challenge undisturbed on merits. On that consistent line of authority, the contrary classification adopted by the Department could not stand, and the demand for differential duty, interest and penalty was held unsustainable.

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Issues: Whether aluminium-based copper clad laminates imported for manufacture of metal clad printed circuit boards were eligible for the concessional rate of customs duty under Serial No. 39 of Notification No. 24/2005-Cus dated 01.03.2005, and whether the demand of differential duty, interest and penalty could be sustained.

Analysis: The eligibility issue was covered by earlier Tribunal decisions holding that metal clad printed circuit boards are printed circuit boards for the purpose of the exemption. Those decisions were followed in later Tribunal rulings and the Supreme Court dismissed the Department's civil appeal against the earlier Tribunal view, including on merits. In view of that consistent line of authority, the imported laminates used in manufacture of metal clad printed circuit boards fell within the exemption entry and the contrary classification adopted by the Department could not stand.

Conclusion: The exemption benefit was admissible to the assessee, and the order denying the benefit and confirming differential customs duty, interest and penalty was not sustainable.

Ratio Decidendi: Where earlier co-ordinate decisions, later followed and left undisturbed on merits, hold that metal clad printed circuit boards are covered by the exemption entry for printed circuit boards, imported laminates used in their manufacture are entitled to the concessional customs duty benefit.

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