TaxTMI 
TaxTMI 
2023 (8) TMI 415
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....aving set up a factory at Sri City, Andhra Pradesh for manufacture of Solar Cells. The appellant is shown to have been importing various capital goods from overseas, to be used in the manufacture of Solar Cells, from Diffused / Undiffused Silicon Wafers / Blue Wafers. Diffused / Undiffused Silicon Wafer / Blue Wafer is claimed to be the basic input / raw material required for the manufacture of Solar Cells and therefore, it appears that after installing the capital goods, the appellant regularly imported Blue Wafers / Silicon Wafers from China, which were cleared through Custom House, Sea Port, Chennai and also Air Cargo Complex, Chennai. 2.1.2 It appears that at the time of import, the appellant sought for classification of the imported goods under CTH 3818 and paid applicable Basic Customs Duty (BCD) at the above places of import. 2.1.3 It appears that in 2019, the Directorate of Revenue Intelligence (DRI) initiated verification process of the imports made by the appellant on the pretext that the imported items were Solar Cells which were classifiable under Customs Tariff Item No. 8541 4011. Based on the above, it appears that the DRI assumed that the above import warranted....
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....olumn 17 of the Worksheet-II under 85414011 as mentioned in column 23 of Worksheet-II; ii. The imported product to be held as solar cells not assembled into panels or modules. iii. Imposition of safeguard duty of Rs.20,30,36,749/- in terms of Notification No. 01/2018-SG as mentioned in column 24 of the Worksheet-II; iv. To confiscate the goods seized vide seizure memorandum dated 18.04.2020 as mentioned in column 26 of the Worksheet-II I under Section 111(m) of the Customs Act, 1962; v. Enforcement of bank guarantee executed for the bills of entry; vi. To hold the imported goods, which were not available for seizure as mentioned in column 26 of Worksheet-II, liable for confiscation under Section 111(m) of the Customs Act, 1962; vii. Imposition of penalty under Section 112 ibid. 2.5 It appears that Notification No. 19/2021-Customs (N.T./CAA/DRI) dated 22.02.2021 was issued whereby a common adjudicating authority was appointed, namely, the Commissioner of Customs, Custom House, Sea Port, Chennai, before whom the appellant filed its detailed reply dated 19.03.2021 to the Show Cause Notice issued. 2.6 Thereaf....
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.... of duty based upon notification are two different independent processes and a strict interpretative process has to be adopted so as to find out the real meaning of the Product Under Consideration. • Report of DG, Safeguards states that imposition of safeguard duty would protect the domestic industry and their company also made substantial investment in India and generated employment. • The imported item i.e., Blue Wafer is processed further wherein various high grade metal pastes such as Silver and Aluminium Pastes are used for creation of fingers (horizontal metallic lines) and busbars (vertical metallic lines). This process is called screen printing. • The busbars are the backbone of most power applications, providing the critical interfaces between the power modules and the outside world. Busbars wire Solar Cells together to create high voltage; as more busbars are added, the idea is that more electrons are able to pass through and power efficiency increases. • After screen printing, sintering process, also called as 'firing process', is carried out in which the front metal contacts are formed in a Silicon Solar Cell. In this ....
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....pellant, has also referred to a report by IIT, Madras dated 15.10.2020, wherein it has been apparently reported that the "sample of Blue Silicon wafer exhibited photovoltaic effect and was able to directly convert sunlight into electrical energy / electricity at the atomic level", and thereafter, has concluded as under: - (i) The classification of the imported goods in India is governed by the General Rules of Interpretation (GRI) and the Harmonized System of Nomenclature (HSN). (ii) CTH 3818 covers such crystals, polished or not, whether or not root coated with a uniform epitaxial layer. (iii) Those more extensively worked devices (e.g., by selective diffusion) fall in heading 85.41 as semiconductor. (iv) Undiffused Silicon Wafer is covered under Customs Tariff Item 38180010. Doped chemical elements of Chapter 28 and chemical compounds containing additives in the forms mentioned in HSN 2017 (other than Undiffused Silicon Wafer) fall under the remaining category of 'Other' under Customs Tariff Item 38180090. (v) The appellant had imported products which had been doped with both Boron and Phosphorus and had undergone extensive work, inclu....
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....y under Notification No. 01/2018-Cus. ibid., the Ld. Commissioner has referred to the DGTR Final Findings dated 16.07.2018 and holds as under: - (i) PUC clearly mentions that the goods which have the ability to convert solar energy into electricity at the atomic level i.e., exhibit photovoltaic effect, are called Solar Cell. (ii) The goods which exhibit photovoltaic effect are called Solar Cells even without electrical connections. (iii) In the test report of IIT, Madras dated 15.10.2020, it has been clearly observed that the imported Blue Silicon Wafer exhibited photovoltaic effect which is sufficient to hold that the impugned goods fall under the definition of Solar Cells for imposition of safeguard duty. 5.2.2 He has recorded the request of the appellant for referring the matter to the Tax Research Unit (TRU), but however, finds that the imported goods have already been tested at IIT, Madras and thus there was no need for any further reference to the TRU. 5.2.3 In view of the above, he finds that the goods imported satisfy the only criteria for imposition of safeguard duty i.e., exhibition of photovoltaic effect and hence, the said goods ca....
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.... imported representative sample has not been tested by the Department. Hence, the core element of determinative factor has not been ascertained and based on an imperfect / incorrect assumption and false presumptions, the impugned order has been passed, which is contrary to the fundamental principles of administrative jurisprudence and also amounts to abuse of quasi-judicial powers. • Ground No.4: The imported item is a Diffused Silicon Wafer / Blue Wafer and to make it as a Solar Cell, post importation, a substantial process of manufacturing in the form of screen printing and sintering process are to be carried out in India and these important aspects have been completely overlooked and in a mechanical and arbitrary manner the original authority has decided the issue, which is contrary to the provisions of the Customs Act, 1962 and also against the Safeguard Duty Regulations. • Ground No.5: Under the International Trade Law, more specifically, as per the guidelines of WTO / GATT, the PUC in the investigation by the DGTR and the product under import should be one and the same or like article for levy of safeguard duty and this is the vital element for....
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....as also issued by the DRI, that even though he has an arguable case on the jurisdiction of the DRI to issue Show Cause Notice, but however, he is not pressing that ground relating to the jurisdiction of the DRI. He has also placed on record an Affidavit duly executed by the appellant to the effect that they are not pressing the ground of the appeal which relates to the jurisdiction of the DRI to issue a Show Cause Notice. 9.2 The same is taken on record. Consequently, we refrain from answering any contention taken out in the appeal memorandum against the said issue. SUBMISSIONS ON BEHALF OF APPELLANT 10.1 The contentions of the Ld. Advocate, taken out during the hearing, could be summarized, as below: - • The investigation of the Directorate General of Trade Remedies was based on a complaint made by the domestic manufacturers of a complete Solar Cell and hence, the PUC was a complete Solar Cell and not a Diffused Silicon Wafer, which is only an intermediate product. • A member country of the WTO is empowered to initiate emergency remediate measures as per Article XIX of GATT, 1994, against import of a particular product and in the domain of Intern....
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....e that it was not based on any IEC / ISO Standards. 10.2.2 Reference is made to the National Institute of Solar Energy (NISE), a testing agency under the Ministry of New and Renewable Energy, which is an approved testing agency to test Solar Cells. He would also contend that the semi-conductor devices are tested in accordance with the standards prescribed by IEC, which are also accepted as Indian Standards by the Government of India through IS Standard No. 12834, 12762, etc. as per which, the photovoltaic cells will have PN junction, cells junction, metallised lines, busbars, grid lines with photovoltaic materials and photovoltaic effect i.e., production of DC voltage by absorption of photons. 10.2.3 Ld. Advocate, while referring to the report of IIT, Madras, further submitted that the said report is incomplete in all respects and thereafter, took us through the observations recorded, which read as under: - a. The sample of Solar Cell does not have printed gridlines (busbars and fingers). b. Screen printing is not completed. c. Since the grid lines are not there for collection of all the electrons generated on the solar....
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....ectric contacts in respect of Blue Wafers, which is not so in the case of the finished Solar Cell; this itself sufficiently reveals that the imported item-Blue Wafers lack the basic element of grid lines that would perform the function of collection of electricity through fingers and conduction of the same through busbars. 10.3.1 It was submitted that the imported item is claimed only as a Diffused Silicon Wafer / Blue Wafer, which upon import is subjected to substantial processes of manufacturing, in the form of screen printing and sintering, which are carried out in India and which are necessary, which have been completely overlooked by the adjudicating authority. 10.3.2 He has referred to the following manufacturing processes that are involved which are carried out in India:- I. Feeder II. Screen Printing (i) Printing Machine 1: Silver Slurry(Back Electrode Slurry) (ii) Printing Machine (iii) Flipper (iv) Printing Machine 4: Silver Slurry (Busbar Slurry) (v) Printing Machine 5: Silver Paste (Finger Slurry) III. Sintering Furnace IV. Testing & Sorting ....
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....estigation by the DGTR and the product under import should be one and the same or like article for levy of safeguard duty which, according to the Ld. Advocate, is the vital element for the levy of safeguard duty and that the impugned order passed is in direct conflict with the basic framework of the International Trade Law. 10.4.2 He would refer to the reply dated 28.12.2020 received from the DGTR towards the request by the DRICZU wherein even the DGTR have indicated the DRI to seek comments/views of Tax Research Unit (TRU), but however, the same has not been obtained by the DRI. 10.4.3 He would refer to the Final Findings dated 16.07.2018 of the DGTR, as also contained in the Review Notification dated 18.07.2020, where it has been proposed to levy safeguard duty only on "Solar Cells otherwise called as photovoltaic cells in the market parlance", to contend that the essential functions of a Solar Cell are conversion of heat or light into electricity, collecting generated current without loss and transmitting / conducting the so collected electricity through busbars and that market parlance is very relevant since it should be recognized as such in the market and capable of bei....
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....r to the DRI, Chennai requesting for reclassification under CTH 854190 as parts of semi-conductors, but, in the impugned order, the adjudicating authority had applied Rule 2(a) of the General Rules of Interpretation and classified the goods under Customs Tariff Item 85414011 as Solar Cells; that it is the settled position of law that the said note is applicable with respect to an incomplete or semi-finished article subject to the condition that such an article has an essential characteristic of the finished / complete product. 10.6.4 He would thus submit that it is essential to critically examine the characteristics of both the imported item and a complete Solar Cell: Solar Cell is capable of converting solar light into electrical energy, the element of grid lines help in collecting the converted electricity through fingers and then the same is transmitted through busbars, whereas the imported Silicon Wafer can never perform the function of collection of electricity or conduction of the same and thus lacks the essential characteristic of Solar Cell. 10.6.5 In the absence of any specific entry for intermediate products which do not contain all the essential characteristics, th....
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....silicon wafer imported by the appellant had already undergone the processes of texturing, diffusing, etching and polishing and PECVD (plasma enhanced chemical vapor deposition) at the overseas supplier's end before import itself, the imported item described by the appellant as "Blue Silicon Wafer" had already attained characteristics that were out of the purview of a silicon wafer of CTH 3818, which was already admitted by the appellant. • Solar Cells are also known as photovoltaic cells in the market parlance, which convert sunlight into electricity by photovoltaic effect. • The definition of 'Solar Cells', as defined by the World Customs Organization in the Explanatory Notes of HSN, is relied upon. • Solar Cells, as defined by the Bureau of Indian Standards, has also been referred to. • The test report of IIT, Madras has also been referred to. 12.5 The appellant has also filed a rejoinder to the written submission filed by the Revenue. 13. We have heard the rival contentions, we have carefully gone through the documents placed on record as well as the literature referred to during the course of arguments and we have also g....
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....e of import, both the goods which were classifiable under both the above tariff entries remained exempted from payment of BCD, as such, no motive could be ascribed to the appellant to avail any undue benefit thereby to cause any revenue loss. Thus, we find that the point of difference between the appellant and the Revenue is whether to classify the imported goods under the category of 'Finished Solar Cell' or under the category of 'Parts of Semi-Conductor Devices' for levy of safeguard duty under Notification No. 01/2018 (SG) dated 30.07.2018. ANALYSIS 15.2 A little analogy may be useful here. India, as a Member of the WTO, is empowered to initiate / investigate for the levy of safeguard duty or Anti-Dumping Duty as a trade remedy, for the purpose of protection of the domestic industry, subject to the broad framework of International Trade Law, as adopted / reconciled with the Indian Law. Though Anti-Dumping Duty and safeguard duty are levied in different contexts / purposes and objects, but however, the common element is the determination of the definition of Product Under Consideration (PUC). Normally, a Notification is interpreted based on the text / language employed ther....
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....ion' is clearly mentioned in the notifications regarding initiation, provisional findings and final findings of the DA and in the present case, the product under consideration on which the anti-dumping duty has been levied is Cold-rolled Flat products of stainless steel of the width 600 mm or more of all series not further worked than Cold rolled (cold reduced). Even though the CTH indicated in the notification is 7219, not all flat products classifiable under CTH 7219 become liable to anti-dumping duty. Only those cold rolled flat products of stainless steel, which are actually of a width of 600 mm or more, will get levied to anti-dumping duty. Any other products even though classifiable under the said tariff heading in terms of chapter notes, section notes or otherwise will not attract anti-dumping duty. It has been mentioned in the findings also that the product under consideration comprises of stainless steel coil, sheets plates of the width of 600 mm or more of all series not further worked than Cold rolled (cold reduced). As such, even if stainless steel circles are classifiable as cold rolled flat products of stainless steel falling under CTH 7219, the same would no....
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....nd is in no way binding on the scope of the present investigation." (Emphasis supplied) 17.3 Paragraph 3.2 of the same Notification reads as under: - "3.2 The applicants claim to manufacture Solar Cells using c-Si Technology and not by using Thin Film Technology. The applicants further state that Solar Cells made by using both Crystalline and Thin Film technologies are used in comparable applications or end uses and there are no material differences between such Solar Cells though the technology used may be different. Therefore, the applicants claim that the domestically produced Solar Cells based on c-Si technology are like and directly competitive articles to the imported Solar Cells originating from the use of either c-Si technology or Thin Film technology." (Emphasis supplied) 17.4 Further, vide paragraph 9, it has been notified that after examination of the application, it was decided to initiate an investigation into the issue thereby inviting views from all interested parties. 18. Thereafter, vide Reference F. No. 22011/68/2017 dated 05.01.2018, the said authority issued a Preliminary Findings, perhaps based on the investigation that was initiat....
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....provide a desired current capability." (Emphasis supplied) 20.2 Further, paragraph 39 reads as under: - "39. Thus, the existing safeguard duty is applied on "Solar Cells whether or not assembled in modules or panels" classifiable under the Tariff Headings 85414011 and/or 85414012 of Chapter 85 of Schedule I of the Customs Tariff Act, 1975. The Customs tariff classification is, however, indicative only and is in no way binding on the scope of the product under consideration." (Emphasis supplied) 20.3 After considering the inputs from various interested parties, the said authority redefined PUC as under: - "45. Taking into account the change in the customs tariff headings, the PUC is defined as follows: "Solar Cells whether or not assembled in modules or panels" classifiable under Tariff Heading 854140 and Tariff Items 85414011 and 85414012 of the Customs Tariff Act, 1975. Solar Cells are also known as Photovoltaic Cells in the market parlance. Photovoltaic technology enables direct conversion of sunlight into electricity at the atomic level and Solar Cells are solid state electrical devices that convert sunlight directly into electricity by the....
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....R replied / issued Office Memorandum dated 28.12.2020, which is reproduced hereinbelow: - The same is placed on record at page 771 of Vol.-III of the appeal memorandum. 26.1 It appears that thereafter, a Show Cause Notice dated 08.01.2021 came to be issued under Sections 28(1) and 124 of the Customs Act, 1962 whereby it was inter alia proposed to hold that what was imported by the appellant was only Solar Cell classifiable under CTH 8541; the same is not a 'part' of photovoltaic cell; the same has PN junction and was exhibiting photovoltaic effect and that the said product was also covered under the ambit of "Product Under Consideration" of DGTR Notification F. No.22/1/2018-DGTR dated 16.07.2018. Thereafter, various proposals were made which are extracted at paragraph 3 of this order. 26.2 The adjudicating authority having considered during adjudication the reply filed by the appellant and also the final report of the DGTR, however, vide impugned Order-in-Original No. 100362/2022 dated 09.12.2022 confirmed the demands, as proposed. 27. We will first analyse the 'Product Under Consideration' (PUC) by the DGTR. PUC, as defined in the original investigatio....
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.... by judicial precedents in identical situations. 28.2 In this context, it is relevant here to refer to the order of CESTAT, Mumbai in the case of M/s. Philips India Ltd. v. Commissioner of Customs, Mumbai [2004 (166) E.L.T. 49 (Tri. - Mum.)] wherein the levy of Anti-Dumping Duty was involved, on the imported Compact Fluorescent Lamp (CFL) with choke or without choke. At the time of import, the product under import was in a semi-finished form and post importation, a few items were procured from the domestic market and subsequently, CFL was manufactured in India. It was the contention of the Revenue that the imported item had attained the essential characteristics of a Compact Fluorescent Lamp and hence, had sought to collect Anti-Dumping Duty in terms of Notification No. 128/2001 dated 21.12.2001. It was inter alia held as under: - "4. ... ... That a notification should be construed strictly is an accepted position in law. It is not possible to interpolate words into a notification. Since the notification imposes ADD only on CFL, one will have to see whether what is imported is CFL at all. It has been brought out that the importers in addition to the....
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....ing, cassette to be kept separate. • Take the cassette with both the hands and place it in the feeder, making sure the blue side of the cell is facing down. • It is allowed to place up to 4 boxes of the cells in the feeder to avoid deformation of the feeding rack caused by the excessive quantity. • Do not place the cassette at the last rack to prevent dust and dirt. II. Screen Printing: • Function and mechanism: highly chemically active metal slurry (such as Silver paste - finger, busbar, back electrode Silver paste, Aluminium Paste is printed on the Blue Silicon Wafer on the front and back side through the set of process of printing machine. (i) Printing Machine 1: Silver Slurry (Back Electrode Slurry) • Printing Back Electrode Slurry: The Back Electrode Slurry is applied on the back side of the Blue Wafer which will help to form Positive Electrode line. • After the Back Electrode Slurry [Silver Slurry is semi-solid by nature] is applied on Blue Wafer, the Blue Wafer will be further moved to the Drying Oven (Drying oven at 200° C). • Drying Oven #1: Wafer is dried to ensure t....
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....ection: • Purpose: Every half an hour, EL conduct the sampling test to ensure whether the printing has any defects or not; if it has any defects, then notify the printing personnel immediately to rectify it. VI. Manual Inspection: • Purpose: Efficiency of the Solar Cell is distinguished as per: colour, A-type cells, B-type Cells and disqualified. VII. Packing Process: • Place the cells as per efficiency and colour on the table or trolley. • Place 4 packs of cells gently in the foam box, cover the box and paste the label and write the particular personnel's QC code. (Note: When covering the lid, ensure all the four packs in the particular box are of the same efficiency and same colour). • Ensure the cells in the carton box are of same efficiency and same colour. • Packing personnel should not mix the efficiency and colour. 29.4 It is clear from the above that after undergoing the above explained processes, a completely new product emerges, which is considered as their manufactured product. There is no doubt that such a final product resulting from their manufacturing activity is sold as such, as s....
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....ery useful to juxtapose the reports of both IIT, Madras and NISE. The report of IIT-M may not throw much light to decide the issue on hand since, all that it says is that the product that was sent for examination did exhibit photovoltaic effect and hence there is the conclusion in the said report that the very same product could be called as Solar Cell for all practical purposes, in scientific/technical parlance, and market parlance. This assumes relevance, as what was complained by the applicant before the authority was about the Solar Cells per se since, as observed by the authority in its notification, the applicant was a body or Association of manufacturers of Solar Cells, who feared that the businesses of some of the association members were being affected by the import of Solar Cells. They are thus not manufacturers of parts of Solar Cells. 32.2 Hence the scope of complaint/application before the authority was to consider levy of safeguard duty on the import of Solar Cells as such and not the parts thereof. Hence, first we have to check and analyse the nature of complaint before we come to the issue in the case on hand. 32.3 In this context, we have to first consider th....
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.... indicative only and is in no way binding on the scope of the product under consideration"." 33. The following words require to be analysed in order to understand the exact/intended meaning of Solar Cells. 33.1 The definition at all the above places starts with "... Solar Cells, whether or not assembled in modules or panels ....". This itself gives indication that the Solar Cells which were under consideration were ready in all respects, to be assembled or not assembled in either modules or panels. This also gives an indication that whether or not assembled, but however, they are ready to be marketed as such, without requiring any further scientific or technical process. The same is assumed to be treated or having undergone all such scientific or technical processes and hence, the same is referred to as Solar Cells, when the words 'market parlance' only indicate what the market recognizes or is known in the market. 33.2 Now let us consider the next point in the definition. 33.2.2 It is said that for practical use, Solar Cells are packaged and connected into an assembly and such an assembly is referred to as Solar Panel or Solar Module. 33.2.3 What we can understand f....
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.... in the immediate vicinity of the probes on the Solar Cell. Therefore, the imported product lacks the basic element of gridlines that performs the function of collection of electricity through fingers and conduction of electricity through busbars. 37.1 The importer has also claimed that the imported product is subjected to 8 various processes which ultimately results in the manufacture of Solar Cells, which is the final product in the market parlance that could be used as such. That product could be marketed as such as a Solar Cell and the same could also be used as it is. The various processes that are claimed to be involved, have been reproduced by us in the earlier paragraphs of this order, and there is also no dispute that four of the above processes are carried out even before the import, at the place of origin itself. To this extent, at least there is no dispute between the parties but however, it is the case of the Revenue that after the process of diffusion which results in the formation of PN junction, itself gives the photovoltaic effect and hence that itself is a Solar Cell. But against this, the importer claims that mere generation of photovoltaic effect is not of an....
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....s a metallic strip or bar typically housed inside bus bay enclosures. The same are the backbone of most power applications, providing critical interfaces between power modules and the outside world. Busbars wire Solar Cells together to create high voltage. Busbars are the vertical lines within solar cells; they are the metallic wires which carry cumulative current of fingers and are used to interconnect others to develop modules. 40.2 Fingers are the horizontal thin lines within Solar Cells, which are also metallic wires, and they collect current and delivers to the connected busbars. Fingers are integrated with the wafers, while busbars are pasted on the surface of the silicon wafers. 40.3 So even though P and N junctions are present, which no doubt exhibit photovoltaic effect, but unless P and N junction are connected with busbars and fingers, the socalled Solar Cells would not perform the desired function, that is to say, the Diffused Silicon Wafer cannot perform their essential function of photovoltaic or semiconductor device. Contacts are therefore required, which are essential in Solar Cells, to collect the electricity which is generated by the photons induced by carrie....
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....s specified in column (3) of the Table hereto annexed and falling within one or more Chapters of the First Schedule to the Customs Tariff Act, 1975, specified in the corresponding entry in column (2) of the said Table, when imported into India, for the purpose of manufacture of goods specified in the corresponding entry in column (4) of the said Table (hereinafter referred to as the said finished goods) from so much of that portion of the duty of customs leviable thereon which is specified in the said First Schedule, as is in excess of amount calculated at the rate of 20% ad valorem, subject to the following conditions, namely :- TABLE S. No. Chapter of the First Schedule to the Customs Tariff Act, 1975 Description of goods Finished goods (1) (2) (3) (4) ... ... ... ... 10. 28, 29, 38, 71 Dopants or Doping Sources in all forms and with or without precious metal constituents Semiconductor Devices, Silicon Single Crystals or Wafers. 41.3 The relevant portion of Notification No. 58/95-Cus. dated 16.03.1995 is reproduced below: - "In exercise of the powers conferred by sub-section (1) of section 25 of the Customs Act,....
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....lso find it appropriate to reproduce the relevant portion of Notification No. 13/97-Cus. dated 01.03.1997, which reads as under: - "In exercise of the powers conferred by sub-section (1) of section 25 of the Customs Act, 1962 (52 of 1962), the Central Government, being satisfied that it is necessary in the public interest so to do, hereby exempts the goods specified in column (3) of Table below, and falling under the Chapters of the First Schedule to the Customs Tariff Act, 1975 (51 of 1975) specified in the corresponding entry in column (2) of the said Table, when imported into India for use in the manufacture of the finished goods specified in the corresponding entry in column (4) of the said Table, from so much of that portion of the duty of customs leviable thereon which is specified in the said First Schedule, as is in excess of the amount calculated at the rate of,- . . TABLE S. No. Chapter of the First Schedule to the Customs Tariff Act, 1975 Description of goods Finished goods (1) (2) (3) (4) ... ... ... ... 24. 38 Silicon in the form of undiffused wafers, discs or chips Semiconductor devices....
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....s not a Solar Cell in all respects, but only an intermediate product. It appears from the reply to the Show Cause Notice that the appellant-importer was successful in obtaining the test report from NISE, which is an organ of the Ministry of New and Renewable Energy (MNRE), in whose website the testing standards have been prescribed to be in terms of IEC standards and notified Indian standards in accordance with IEC standard. As per the said standard, eight parameters are set for testing the product in order to understand the technical and mechanical characteristics of the Solar Cell. In this regard, it appears that the importer forwarded both the imported Blue Silicon Wafer as it is and also finished Solar Cell which was manufactured by the importer itself. 44.2 The importer has clearly brought out in its reply to the Show Cause Notice itself what the report of NISE revealed and its importance. They have clearly indicated that the said authority did not test the Blue Wafer samples since the same did not qualify as a Solar Cell, referred to the multi-crystalline Solar Cell and the test report showing results for Voltage (open circuit) as 0.63 V, Cell Efficiency as 17.42% and Pmax....
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....ear metallized regions in the case of finished Solar Cells whereas no such elements were detected in the Blue Wafers. The above is part of the Reply to the Show Cause Notice, placed on record. 47. A harmonious reading of the available test reports and the standards adopted by each of the experts while testing the samples, clearly indicate that Blue Silicon Wafer is just an input and an intermediate product, which could not be compared with or called as 'Solar Cells'. The Solar Cells in market parlance would emerge only after the formation of busbars and fingers through the process of screen printing and sintering. Hence, the Diffused Silicon Wafer and the 'Solar Cells' are different products altogether. In the context of the above, we are tempted to understand that in scientific parameters and so also in terms of marketability / market parlance, the imported Diffused Silicon Wafer is an incomplete, intermediate product which cannot be sold as a Solar Cell in the market and as such, it has no use. 48.1 In the Show Cause Notice, the authority has referred to various technical reports about the Solar Cell technology. The importer has also referred to another set of tech....
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....of the view that the Revenue has jumped the gun in a haste, without analysing all the facts and evidences in the form of scientific/technical literatures vis-à-vis the purpose of application and the PUC. 50.1 Now let us look into the applicability of safeguard duty at the international level. Under the International Trade Law, as per the guidelines of WTO/GATT, the PUC under investigation by the DGTR and the product under import should be one and the same or like article for levy of safeguard duty. It is also a matter of record that the Commissioner himself had entertained a doubt as to whether the PUC and the product imported by the importer in the case on hand were one and the same and as an abundant precaution, the Commissioner thought it fit to seek the clarification from the competent authority which resulted in issuing a letter dated 16.12.2020. This ipso facto proves that there was a possibility that the two products in question are different and it is only a prima facie view. In such a scenario and having approached the competent authority - DGTR for clarifications, the Commissioner should have approached the Tax Research Unit as well as suggested, since any levy ....
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....scussions, our observation is that the Revenue is trying to put the cart before the horse, in the sense that they are trying to fit in the case of the present importer into the Notification, whereas, they should have analysed in detail the case of the importer and the product imported, and then check if the product satisfies the definition as per the said Notification. 51.2 In the light of the above discussions, we deem it appropriate to highlight the differences between the product under import and the Product Under Consideration, as below: - Differences between Diffused Silicon wafer / Blue Wafer (Product Under Import) and Solar Cells (Product Under Consideration) in terms of technical characteristics and market parlance: S. No. Criteria / Parameter PUI PUC 1 Finished OR intermediate product Intermediate product and not a finished product. It is a finished product. 2. Essential character It is a diffused wafer and only capable of converting sunlight into electricity and in the absence of screen printing, it is dumb without any essential character. It has all the essential characteristics such as, capable o....
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....ther processing is required. 10 IEC 60904-1; 2006-2009/IS 12762 Part 11 There is no prescribed standard for testing Diffused Silicon Wafer since it is an intermediate product. Solar Cells are tested as per the standards specified. 11 Is it capable of being placed on a solar module or solar panel Not possible since it is an intermediate product and has to undergo intricate and significant manufacturing process. It is capable of being placed on a solar module or in a panel since it is a manufactured and finished product. 12 Is it a photovoltaic device It is not a device since it is incomplete / semi-finished and it is only an intermediate product. It is a device capable of performing all the essential functions of Solar Cell. 13 Is it marketable Cannot be marketed for making solar panel or solar module. It can be marketed as such since it has all technical elements and functional utility. 14 Customs Tariff Heading of the Item 8541 90 00 Since it is not a finished semi-conductor device and it is a processed and intermediate product and not a manufactured Solar Cell, which lacks the capacity to perform essential fu....
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....i-conductor device. It, therefore, denotes that a diffused chip as such is not a semiconductor device in itself. 52.1.3 The same analogy would apply to the case on hand. It boils down to the fact that the imported item is only a raw material or semi-finished product which is used in the manufacture of Solar Cells. 52.2 The ratio laid down in M/s. Keltron Power Devices Ltd. (supra) has been followed by the Tribunal, New Delhi in the cases of M/s. Semi-Conductors Ltd. v. Collector of Customs [1989 (42) E.L.T. 236 (Tribunal)] and M/s. Bharat Heavy Electricals Ltd. v. Collector of Customs, Bombay [2002 (149) E.L.T. 79 (Tri. - Del.)]. The order in the case of M/s. Semi-Conductors Ltd. (supra) was appealed before the Hon'ble Supreme Court, but the same was dismissed by the Hon'ble Supreme Court as reported in 1997 (93) E.L.T. A131 (S.C.). In the order of M/s. Semi-Conductors Ltd., the order in the case of M/s. Keltron Power Devices Ltd. (supra) was followed and hence by the doctrine of merger the order in M/s. Keltron Power Devices Ltd. has thus attained finality. We also find that it has been clearly demonstrated by documentary evidence that substantial value add....
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.... different. In commercial world it is treated as two different commercial commodities. Even the Central Government treated the same as two different commodities. It is also well-established principle of law that in interpreting a particular commodity the dictionary meaning and technical meaning should not he adhered to and that in a Taxing Statute word of every day use-must be construed not in their scientific or technical sense, but as understood in commercial parlance. Reference may be made in this connection to the decisions of Supreme Court of India in Ramavatar Budhai Prasad v. Assistant Sales Tax Officer, Akola, AIR 1961 S.C. 1325: M/s. Motipur Zamindary Company v. State of Bihar. AIR 1962 S.C. 660 and State of West Bengal v. Washi Ahmed, AIR 1977 S.C. 1638 and Porritia and Spencers (Asia) Limited v. State of Haryana, reported in 1983 E.L.T. 1607 (S.C ) = AIR 1979 S.C. page 300. In view of the above decision of the Supreme Court and in view of the statutory definitions of cement under the Imported Cement (Control) Order, 1978 and the booklets issued by the Indian Standard Institution it is no longer open for the Collector of Customs to ignore such definition and to contend th....
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....pugned order has held that the item in question does not satisfy the requirements for classification as felt under sub-heading 5602.90. The order notes that the item is neither felt according to the generally accepted identity of felt or the definition of needle loom felt. The order also notes that under commercial or market parlance the item is not treated or recognised as felt. The order further notes that Revenue has produced no material to show that the impugned goods are marketed or marketable as felt at the stage at which they are removed from the respondents' factory, while respondents have produced technical and trade opinions from I.I.T., Delhi and from traders to show that they are not recognised as felt technically or commercially." 53.1 The first issue is with regard to the determination of classification. In the impugned order, the Commissioner has held that the imported Diffused Silicon Wafer has to be classified under CTH 8541 4011 under the specific entry of Solar Cells. The adjudicating authority has reached the said conclusion with the aid and support of Rule 2(a) of the General Rules of Interpretation. It was the observation of the Commissioner that the import....
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..... Therefore, the imported item is not classifiable under the specific heading of Solar Cell, i.e., CTH 8541 4011. Also, at the time of import, it has not attained the status of a finished semi-conductor device. It is also noteworthy here that CTH 8541 9000 deals with Parts of Semi-conductor devices. As per the scheme of arrangement of various Headings and Sub-Headings of CTH 8541, it is found that CTH 8541 deals with finished goods and also parts of semiconductor devices and covered under CTH 8541 90. There is no specific entry for an incomplete or an intermediate product. Though in a conventional sense, the imported Diffused Silicon Wafer is not a part of Solar Cell, for the purpose of classification, it has to be dealt as a product other than a finished Solar Cell. The imported item cannot be equated with a finished Solar Cell. A Solar Cell is manufactured from diffused Silicon Wafer and hence, the imported item is only a raw material or a base material or can be considered as a part or intermediate product for manufacture of Solar Cell. Considering the arrangement of Tariff, intermediate / semi-finished product is equated as parts of semi-conductor devices and thus, the contenti....
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....able under CTH 3818 attracted 12% I.G.S.T. whereas, the goods classifiable under CTH 8541 attracted 5% I.G.S.T. Hence, overall evaluation of the rates of duty provides the factual clarity that the change of classification will have no impact on the interests of the Revenue. We also find that the appellant itself had submitted a letter to the office of the DRI for revision of classification even prior to the issuance of the Show Cause Notice. 55.3 It is the settled position of law that in cases where classification of goods is involved, confiscation by re-classifying the same is not possible, that too alleging mala fide intention, since, in our view, the same amounts to a different view adopted by the authorities. Hence, it becomes necessary for the Revenue to establish mala fide intention on the part of an importer for classifying the goods under import and in the absence of any proof, there will be no scope to suspect the bona fides of an importer. We find support from the decision of the Hon'ble Supreme Court in the case of Union of India v. M/s. Garware Nylons Ltd. [1996 (87) E.L.T. 12 (S.C.)] wherein, at paragraph 15, it has been categorically held as under: - ....