TaxTMI 
TaxTMI 
2024 (4) TMI 729
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....ants under two Bills of Entry (B/E) No. 9574139 dated 16.07.2022 and B/E No.2453614 dated 15.09.2022 for availing Customs duty exemption under Sl. No. 29 and 30 of Notification No.24/2005-Customs dated 01.03.2005, as amended. 2.2 The appellants have also filed two Miscellaneous Applications No. 85588/2023 and No.85755/2023 in Customs Appeal No.85352 of 2023 and another two Miscellaneous Applications No. 85589/2023 and No.85756/2023 in Customs Appeal No.85353 of 2023, for incorporation of certain additional grounds in their appeal filed before the Tribunal, which got omitted due to their inadvertent error. On careful examination of the applications filed by the appellants for consideration of these additional grounds vis-à-vis the case records, we find that the averments made therein justify the case for consideration of such additional grounds and accordingly, we take up those additional grounds as part and parcel of the appeal memorandum for consideration. In view of the above, the miscellaneous applications are taken up for hearing along with main appeals in the case and for a decision on merits. Accordingly, these miscellaneous applications are disposed of on the above....
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....oms were appealed against by the appellants before the learned Commissioner of Customs (Appeals), which were disposed of vide impugned order dated 21.02.2023 passed by him in upholding the orders passed by the original authority and rejecting the appeals filed by the appellants. Feeling aggrieved with the impugned orders, the appellants have preferred these appeals before the Tribunal. 3.1 Learned Advocate appearing for the Appellants, stated that the impugned goods viz. 'open cell' undisputedly is classifiable under CTH 85.24, and it is not disputed by the Department. In terms of Note 7 to Chapter 85, all articles of 85.24 are treated as 'device' or 'apparatus'. Accordingly, he claimed that open cell will qualify as 'device' and its use as 'liquid crystal display' will qualify as 'liquid crystal device'. In addition to the above, it is also claimed by the appellants that 'open cells' in as-imported condition/ as such can be used for manufacture of monitors falling under sub-headings 8528.42, 8528.52, 8528.62, solely or principally used in automatic data processing system of heading 84.71 and therefore are eligible for exemption under Sl. No. 29 of Notification No.24/05-Customs ....
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....on account of multiple use/function; in the absence of end use condition in the notification, benefit cannot be denied so long as goods conform to the description mentioned in the notification, learned AR stated that in terms of the judgement in the case of Commissioner of Customs (Import), Mumbai Vs. Dilip Kumar & Company 2018 (361) E.L.T. 577 (S.C.), all the earlier decisions prior to 2010 are not applicable in view of the recent judgement of the Hon'ble Supreme Court. Learned AR submitted that the said decision of the Hon'ble Apex Court, has held that exemption notification should be interpreted strictly; the burden of proving applicability would be on the assessee to show that his case comes within the parameters of the exemption notification; when there is ambiguity in exemption notification which is subject to strict interpretation, the benefit of such ambiguity cannot be claimed by the assessee and it must be interpreted in favour of the revenue. Accordingly, Learned AR submitted that the impugned order of the Commissioner of Customs (Appeals) is legally sustainable. 4. Heard both sides and perused the records of the case. We have also considered the additional written su....
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.... 17(5) ibid, for re-assessment of the impugned goods, contrary to the self-assessment done by the appellants-importer had issued the Order-in-Original dated 17.11.2022, in denying the Customs duty exemption claimed by the appellants. The relevant portion of the above Order is extracted and given below: "ORDER 14(i) I reject the declared notification benefit of Notification No. 24/2005- Customs dated 01.03.2005 Sr. No. 29, claimed for item No. 4 in Bill of Entry 9574139 dated 16.07.2022 of M/s. MIRC Electronic Ltd, (IEC No. 0388063394) and order to re-assess the item no. 4 with notification benefit of Sr. No. 515A of Notification 50/2017-Cus. (ii) I reject the declared notification benefit of Notification NO. 24/2005-Customs dated 01.03.2005 Sr. No. 30, claimed for item No. 6, 7, 12, 30 & 44 in Bill of Entry 9574139 dated 16.07.2022 of M/s. MIRC Electronic Ltd, (IEC No. 0388063394) and order to re-assess these items with notification benefit of Sr. No. 516 of Notification 50/2017-Cus. " 6.3 Similarly, imported goods under dispute covered under B/E No. No.2453614 dated 15.09.2022 have been declared as ' Open Cell 42.5" ' under item Sl. No.10 & 24 of invoice No....
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.... 0388063394) and re-assessed these items under merit rate of duty." 6.4 Feeling aggrieved against the Original re-assessment orders dated 17.11.2022 and 29.11.2022, the appellant had preferred an appeal before the Commissioner of Customs (Appeals), who on the basis of certain findings had rejected the appeals filed by the appellants by holding that there are no reasons to interfere with the Original Orders and upheld the same. The specific findings given in the impugned order and the conclusion arrived by the learned Commissioner of Customs (Appeals) is extracted and given below: "5.2 During the assessment, the Assessing Officer raised queries with respect to the exemption claimed by the Appellants under Sr. No. 29 and 30 of Notification No. 24/05-Cus., on the ground that imported Open Cell is not an LCD Device. As per the department, Open Cell and its parts are correctly eligible for concessional rate of BCD @ 5%/10% in terms of Sr. No. 515A and 516 of Notification No. 50/17-Cus. dated 30.06.17, and are not eligible for complete exemption from BCD under Notification No. 24/05-Cus., dated 01.03.05 as claimed by the Appellants. 5.3 The original authority rejecte....
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....cell. Also it is clear that Open Cell is the major component in an LCD/LED device & it is usable in both LCD/LED". Hence, from the technical understanding, LED panel manufacturing process, it is clear that the Open Cell is just a part of LCD Panel assembly imported principally for use in manufacturing of LCD/LED television panels. 11. In the instant case, I find that the Notification No. 50/2017-Cus as amended vide Notification No. 32/2018-Customs dated 23.03.2018 (Sr. No. 515A), the item which is eligible for exemption for concessional rate of duty is "Open Cell (15.6" and above) for use in the manufacture of Liquid Crystal Display (LCD) and Light Emitting Diode (LED) TV panels of heading 8529". From this, it is very clear that open cell is a part of LCD/LED TV panel for which the concessional rate of duty has been extended. It is not the case of the appellant that the 'Open Cell' imported by them are not used for manufacture of LCD/LED TV's. 12.1 I observe that the impugned goods "Open Cell" are used in the manufacture of Liquid Crystal Display (LCD) and Light Emitting Diode (LED) TV panels and cannot be considered as the Liquid Crystal Display (LCD) itself as c....
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.... of the term "Open Cell" given by the Deputy General Manager, Head of Engineering department of the appellants, and stated that open cell is a major component in an LCD/LED device and it is usable in manufacture of LCD/LED television panels. Accordingly, he has concluded that since certain other components have to be attached converting it into a fully functional LCD, 'open cell' cannot be considered as LCD. On the above basis, learned Commissioner of Customs (Appeals) had concluded that that benefit of customs duty exemption in the exemption entry at Sr. No.29 & 30 of the Notification No.24/05-Cus., dated 01.03.2005 is not applicable to the impugned goods viz. "Open Cells" and "associated parts of Open Cells". 8.1 In order to properly appreciate the conclusion arrived at in the impugned order in denying the Customs duty exemption claimed by the appellants, we would like to firstly refer to the relevant exemption notification No.24/2005-Customs dated 01.03.2005 as amended, the relevant portion of which is extracted below: "Notification No. 24/2005-Customs New Delhi, dated the 1st March, 2005 10 Phalguna, 1926 (Saka) G.S.R. (E).- In exercise of the powers confer....
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....e goods under specific Customs Tariff Item (CTI) and to examine, whether such CTI or sub-heading or headin is covered under the above exemption. In respect of 'All goods', it would suffice to see that the imported goods are covered under the respective heading or sub-heading or CTI; however, for other phrases, the requirement of compliance is at varying levels from simple declaration/determination of 'for use' to 'sole and exclusive use'. In respect of these phrases used as 'all goods' which is further qualified for certain purpose such as 'for use', 'of a kind', 'for sole and exclusive use', 'for the manufacture' etc., there is a further requirement to examine whether these purposes for which the exemption have been extended by use of different phrases in the above Notification is also fulfilled in order to grant exemption under the respective entries at various serial numbers. 8.2 In careful examination of the impugned order passed by learned Commissioner of Customs (Appeals), we find that such an examination has not been carried out. This is for the reason that firstly, the description of the goods specified in the exemption entry at Sl. No. 39 viz., 'Liquid Crystal Devices' ....
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....lication of the mind and thus the impugned order dated 21.02.2023, is liable to be set aside on these grounds alone. 9.1 We also find that the appellants had submitted in their appeal papers filed before the learned Commissioner of Customs (Appeals) which was received by him on 10.01.2023, detailed grounds for their claim of duty exemption benefits under Sr. No.29 & 30 of the Notification No.24/05-Cus., dated 01.03.2005, including the following: (i) Technical explanation of the item 'open cell' and how it is Liquid Crystal Device; (ii) Definition of Liquid Crystal Device provided under HSN Explanatory notes; (iii) Amendments to the customs tariff entry of Liquid Crystal Device over the years on account of HSN changes and the history of creation of separate entry for 'open cell' and later merging it with new tariff entries introduced under CTH 85.24 with effect from 01.01.2022 as part of HSN changes (iv) scope of the coverage of CTH 8524 in terms of chapter note 7 introduced w.e.f. 01.01.2022 and how the 'open cell' are specifically referred in the HSN explanatory notes under the category of flat panel display modules without drivers or control....
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....esigned to be incorporated into articles of other headings prior to use. Display screens for flat panel display modules include, but are not limited to, those which are flat, curved, flexible, foldable or stretchable in form. Flat panel display modules may incorporate additional elements, including those necessary for receiving video signals and the allocation of those signals to pixels on the display. However, heading 8524 does not include display modules which are equipped with components for converting video signals (e.g., a scaler IC, decoder IC or application processer) or have otherwise assumed the character of goods of other headings. For the classification of flat panel display modules defined in this Note, heading 8524 shall take precedence over any other heading in the Nomenclature." 10.2 The Tax Research Unit of the Ministry of Finance, in bringing out the above changes introduced in the Budget for the year 2021-2022, vide D.O.F. No. 334/02/2020-TRU dated 01.02.2021 had issued instructions explaining the changes made in the First Schedule to the Customs Tariff as follows: "II. Amendments in Customs Tariff Act, 1975: (a) First Schedule to the....
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....der Sr. No.29 & 30 of the Notification No.24/05-Cus., dated 01.03.2005 should be extended to the impugned goods. 13.1 We are also of the considered view that the authorities below in reassessment of impugned goods under Section 17(5) ibid, are required to pass a reasonable order, which is of a speaking nature, conforming to the requirements of the definition of 'assessment' which include such 'reassessment'. Hence, it is imperative that amongst other issues, tariff classification of imported goods and exemption or concession of duty issued under notifications issued under Section 25 ibid are required to be examined and determined in order to fulfill the requirements of reassessment in terms of Section 2(2) ibid. 13.2 In this regard, we find that requirement of Section 17(5) ibid in passing of a 'speaking order' is a specific requirement and hence the basic requirement is to record the reasons for arriving at an order, which has not been fulfilled by the authorities below. We also find that the Hon'ble Supreme Court in the case of Kranti Associates Pvt. Ltd. Vs. Masood Ahmed Khan 2011 (273) E.L.T. 345 (S.C.) had elaborated in detail the various aspects of the speaking order th....
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....trate by reason that the relevant factors have been objectively considered. This is important for sustaining the litigants' faith in the justice delivery system. (j) Insistence on reason is a requirement for both judicial accountability and transparency. (k) If a Judge or a quasi-judicial authority is not candid enough about his/her decision making process then it is impossible to know whether the person deciding is faithful to the doctrine of precedent or to principles of incrementalism. (l) Reasons in support of decisions must be cogent, clear and succinct. A pretence of reasons or 'rubber-stamp reasons' is not to be equated with a valid decision making process. (m) It cannot be doubted that transparency is the sine qua non of restraint on abuse of judicial powers. Transparency in decision making not only makes the judges and decision makers less prone to errors but also makes them subject to broader scrutiny. (See David Shapiro in Defence of Judicial Candor (1987) 100 Harward Law Review 731-737). (n) Since the requirement to record reasons emanates from the broad doctrine of fairness in decision making, the said requirement is now vir....