TaxTMI 
TaxTMI 
2025 (11) TMI 1731
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....ts the appeal filed by the appellant and confirms the order dated 20.02.2020 passed by the Deputy Commissioner of Customs Group-VA [the Deputy Commissioner] . The Deputy Commissioner held that Mechanical Electrical Assembly [the Assembly] Front imported by the appellant cannot be considered as "Display Assembly" and, therefore, would not be entitled for exemption under Customs Notification No. 57/2017 dated 30.06.2017 [the Exemption Notification], as amended from time to time. The Deputy Commissioner, accordingly, finalized the provisionally assessed Bills of Entry by disallowing the benefit of the aforesaid Exemption Notification and ordered for payment of differential duty. 2. The remaining 25 Customs Appeals have been filed by the appellant for setting aside the order dated 31.10.2022 passed by the Commissioner (Appeals) rejecting the 25 appeals filed by the appellant against the assessment of the Bills of Entry. The said order follows the earlier order dated 23.12.2021 (date wrongly referred to as 10.12.2021) passed by the Commissioner (Appeals) and denies the benefit of the Exemption Notification to the Assembly Front imported by the appellant. 3. As the benefit of the E....
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....ification, which covers "Display Assembly" used in the manufacture of cellular mobile phones. 6. The common issue involved in all these appeals is whether the Assembly Front imported by the appellant and used in the manufacture of mobile phones would be eligible for exemption under the Exemption Notification. Serial No. 6(a)(iv) of the Exemption Notification, inter alia, grants exemption to "Display Assembly" subject to the condition that the importer follows the procedure set out in the Customs (Import of Goods at Concessional Rate of Duty) Rules, 2017 [the 2017 Rules] . There is no dispute that the appellant followed the procedure set out in the said 2017 Rules and used the Assembly Front in the manufacture of mobiles phones. The dispute is as to whether the Assembly Front imported by the appellant is a "Display Assembly" referred to at Serial No. 6(a)(iv) of the Exemption Notification. 7. The Assembly Front has been described by the appellant to be an assembly of various components which constitute the display unit of a mobile phone. It is used in high-end flagship models such as Galaxy Note 10 and consists of various components which, inter alia include main display, meta....
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.... The Deputy Commissioner raised an objection against the claim of exemption benefit under Serial No. 6(a)(iv) of the Exemption Notification. Accordingly, this Bill of Entry was released on provisional assessment. April 2018 onwards, all subsequent Bills of Entry of Assembly Front were assessed provisionally subject to execution of Provisional Duty Bond. By a letter dated 21.10.2019, the Deputy Commissioner informed the appellant that the Assembly Front does not satisfy the scope of "Display Assembly" and accordingly would be ineligible to claim exemption under Serial No. 6(a)(iv) of the Exemption Notification. By a letter dated 07.11.2019, the appellant explained the nature and functioning of the Assembly Front and, accordingly, submitted that it is eligible to claim exemption under the Exemption Notification. 12. A show cause notice dated 14.01.2020 was issued to the appellant to show cause as to why the benefit claimed by the appellant for the Assembly Front under the Exemption Notification should not be rejected and the provisionally assessed Bills of Entry should not be finalized by disallowing the benefit of the Exemption Notification under section 18(2) of the Customs Act,....
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....ts specific definition in the statute, has to be construed accordingly. Further, the intent behind the subject notification can be better understood in terms of response dated 17.12.2019 from MEITY (the principal agency behind Phased Manufacturing Programme) which read as: "...... After detailed deliberations, the committee was of opinion that the representative sealed sample provided by O/o the Principal Commissioner of Customs (Import) is an assembly, inter-alia, containing aforementioned parts/sub-assemblies of mobile phones and cannot be considered a 'Display Assembly' only as covered under the PMP notified by MEITY......" From MEITY's response, I find that the impugned goods i.e. MEA Front cannot be construed as 'display assembly' so as to be covered under item 6(a) of table and be eligible for exemption of subject notification. ***** 41. I also find that when all the components involved in MEA front (for e.g. Battery, Motor, display, and receiver) are mentioned at different serial nos. of the subject exemption notification, then benefit to these parts is to be provided as per different serial nos. The notification has to be read in-toto....
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....n 57/2017-Cus had been issued to implement the Phased Manufacturing Progamme and thus the two are closely interlinked. As can be seen from the chart under para 27, various amendments in notification 57/2017-Cus closely follow timelines of PMP Notification. Thus neither can PMP notification nor the MEITY opinion be brushed aside and they need to be read together to arrive at a conclusion in this case. 5.4.1 The legislatives intent behind an exemption notification is a crucial factor to interpret the scope of entries in the exemption notification. ***** 5.4.2 The intent has been made amply clear by the PMP Notification as well as the opinion of Nodal Ministry i.e. MEITY. Therefore reliance on the same and exclusion of impugned goods from entry S.No. 6(a)(iv) of Notification No. 57/2017-Cus is proper and justified. 5.5 I also note that since there is no definition of "Display Assembly" [referred to in S.No. 6(a)(iv) of Notification No. 57/2017Cus], the ambiguous position has arisen and the notification needs to be interpreted so as to arrive at conclusion as to whether "MEA Front" is covered under it or not. As discussed above, the legislative intent is clea....
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....y [2001 (134) E.L.T. 604] ; (b) Philips India Ltd. vs. Collector of Central Excise, Pune [1996 (81) E.L.T. 375] ; (c) Aveco Technologies Pvt. Ltd. vs. Commissioner of Cus., Hyderabad [2018 (362) E.L.T. 624] ; (d) Badra Estate & Industries Ltd. vs. Collector of Customs, Bangalore [1997 (93) E.L.T. 46] ; (e) Collector of Customs vs. Blue Star Ltd. [1990 (50) E.L.T. 186 (Tri.)] ; (f) BenQ India Pvt. Ltd. vs. Additional Director General (Adjudication) DRI [Customs Appeal No. 52428 of 2019 decided on 12.09.2022] ; (g) Sanghi Synthetics Pvt. Ltd. vs. Collector of Customs, Bombay [1996 (82) E.L.T. 238 (Tri.)] ; and (h) Sony India Pvt. Ltd. vs. CC, C.Ex., New Delhi [2019 (370) E.L.T. 1774 (Tri. - Del.)] (iv) The first rule of interpretation of a statue demands that the words in the statue must be given literal and strict interpretation. Other aids to interpretation are attracted only when the literal interpretation leads to 'absurdity'. Merely because words in a statue have not been defined, it does not lead to automatic absurdity; (v) The term "Display Assembly" must be understood in the terms of the natural ....
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....tinct meanings. 'Display Assembly' is a narrower term that refers to the core display component. 'Display Unit', on the other hand, is a broader and more comprehensive term. Thus, 'Display Assembly' is a sub-set of a 'Display Unit'. 19. The submissions advanced by the learned counsel for the appellant and the learned authorized representative appearing for the department have been considered. 20. The issue that arises for consideration in these appeals is whether the appellant is justified in availing exemption from payment of basic customs duty under Serial No. 6(a)(iv) of the Exemption Notification on the Assembly Front imported by the appellant. 21. The Exemption Notification has been issued under section 25 of the Customs Act. It provides exemption from basic customs duty to goods which fulfill the following conditions: (i) Goods of 'Any Chapter' (ii) Goods are used in the manufacture of cellular mobile phones. (iii) Goods are 'Display Assembly'. 22. It is not in dispute that the first two conditions are satisfied. The only issue is as to whether the third condition that the goods are 'Display Assembly' is satisfied. 23. In the present ....
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....er, but for deciding whether the appellants are entitled for the benefit of notification, it is to be seen whether the goods of the appellants answer the description given in Sl. No. 10 of the exemption Notification 56/93-C.E., dated 282-1993. Serail No. 10A mentions the description as follows : "Radio sets including transistor sets". 14. There is no doubt that the goods manufactured by the appellants is for the purpose of reception of radio broadcasting. But, at the same time, it is fitted with the equipment which will record sound and is fitted with mechanism of reproducing the same. The question is, merely because of the fact that it is fitted with sound recording or reproducing apparatus can it be taken away from the purview of the Notification 56/93, dated 28-21993. In order to appreciate this contention, what is necessary to be seen is whether the goods manufactured by the appellants is capable of being used as receptive apparatus for radio broadcasting. As far as this point is concerned, it is admitted fact that the goods manufactured by the appellants, have capacity of reception of the radio broadcasting. Therefore, when the goods manufactured by the appel....
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....he whole intent of PMP and grant of exemption from customs duty is that various sub-assemblies should get manufactured in India in a phased manner. Duty free import of MEA that includes various sub- assemblies of 104 parts most of which are otherwise not eligible for exemption (like Battery, Receiver, PCBA, Vibration Motor, etc.) defeats the very intent of PMP. ******* 9. This office is of the considered view that the impugned item i.e. MEA Front is not the 'display assembly' as covered under the PMP as well as under the impugned Customs notification and therefore, is appropriately classifiable under CTH 85177090 as a part of the mobile phone and liable for BCD @15%." (emphasis supplied) 26. The report dated 12.12.2019 submitted by the committee in response to the aforesaid letter sent by the Principal Commissioner is reproduced below: "Subject: Report of the committee containing the technical opinion, whether the sample provided by the Office of the Principal Commissioner of Customs (Imports) can be considered as a 'Display Assembly' as covered under the PMP notified by Meity and whether it would be eligible for the benefit of....
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....that what weighed with the committee to conclude that the Assembly Front cannot be considered as a 'Display Assembly' was the fact that the Assembly Front in addition to a 'Display Assembly' also contains parts/sub-assemblies of mobile phones. The report dated 12.12.2019 submitted by MEITY, therefore, holds that the Front Assembly could be considered as a 'Display Assembly' if it did not also contain parts/sub-assemblies of mobile phones. 28. It is this report dated 12.12.2019 submitted by the committee that formed the basis for the Deputy Commissioner and the Commissioner (Appeals) to hold that the Assembly Front would not be a 'Display Assembly' and consequently would not be entitled to the benefit of the Exemption Notification under Serial No. 6(a)(iv). 29. It would be seen from the report dated 12.12.2019 submitted by a committee constituted by MEITY that emphasis has been placed on the fact that the Assembly Front does not only consist of a 'Display Assembly', even though the word 'only' does not occur in the Exemption Notification. The report of the committee cannot curtail or restrict the scope of the Exemption Notification. 30. This view finds support from the judg....
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....tablishing that the imported goods could not reasonably be classified under any other head. In this particular case the onus had not been discharged by the Revenue. The only evidence on record was the opinion sought for by the Ministry of Finance itself and given by the Department of Telecommunications to the effect that the Model LSP 340 was in fact covered by the phrase "cellular telephone". Since there is no dispute that the technology used in LSP 340 and the hand held mobile phone is the same there is no warrant to limit either the tariff entry or the exemption notification to hand held cellular phones. Neither the range nor the size would make any difference." (emphasis supplied) 32. This apart, the terms of the Exemption Notification cannot be given a restricted meaning by adding the word 'only' when the Notification does not contain such a restriction. This is what was held by the Supreme Court in Union of India vs. Tata Iron And Steel Co. Ltd. [1997(1) E.L.T. J61 (S.C.)] The Notification of which benefit was claimed granted exemption to duty paid pig iron duty paid pig iron was also mixed with other non duty paid materials. It is in this context that the Supreme Court....
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....Y based on solar power and other power can also be used charged the devices. In our considered view, the adjudicating authority has erred in coming to this conclusion because the Notification does not say ―devices based solely on solar power but says ―solar based devices. It does not in any way forbid the alternative sources of power to support them. Simply because there are four other alternative means through which they can be charged, it does not mean that the imported goods are not solar power based devices. Therefore, the imported goods merit classification under 234 of Schedule I of Notification 1/2017. Consequently, the demand for IGST differential duty along with interest cannot be sustained." (emphasis supplied) 34. In Indian Organic Chemicals vs. Collector of Central Excise, Madras [1988 (35) E.L.T. 535 (Tribunal)], the Tribunal held: "9. Shri Sachar has also ably argued that the decision of the Supreme Court in the case of Aluminium Corporation of India Limited v. Union of India & others (supra) and Union of India & Others v. Tata Iron & Steel Co. Ltd. (supra) was essentially based on the principle that where the raw material included duty-paid....
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....ing the Exemption Notification for the simple reason that it is the terms of the Exemption Notification that have to be read to determine whether exemption can be granted or not to a particular product. It is the plain language and not the intention of the authority issuing the Notification that has to be seen while interpreting a taxing statue or an Exemption Notification. 37. In this connection, reference can be made to a decision of the Tribunal in InterGlobe Aviation Limited vs. Commissioner of Customs [Customs Appeal No. 51937 of 2021 decided on 05.08.2024] . The relevant portion of the decision is reproduced below: "59. The contention advanced by the learned counsel for the appellant deserves to be accepted. There can be no doubts that while interpreting an Exemption Notification, it is the text and the language employed in the Notification that is relevant and the intention of the Government or the authority issuing the Notification would, therefore, not be significant." (emphasis supplied) 38. Reference can also be made to the Constitution Bench judgment of the Supreme Court in Hemraj Gordhandas wherein it was observed that in a taxing statue there i....
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.... parlance' is not supported by any evidence and is merely an assertion. 41. Reliance placed by the learned Special Counsel of the department on the two Circulars dated 18.08.2022 and 07.08.2024 issued by CBIC is misplaced. The Circulars run contrary to the express terms of the Notification and both the Circulars are based on the recommendation of MEITY. In fact, both the Circulars accept the position that the Assembly Front is essentially a 'Display Assembly', but clarify that "if the following items are fabricated, embedded, fitted or attached with the display assembly of the cellular mobile phone, then the benefit of BCD treatment provided to display assembly would not be available to such assembly". Thus, both the Circulars curtail the benefit of the exemption to the Assembly Front by introducing additional conditions even though the Assembly Front may satisfy the description of the product in the Notification. 42. There is no ambiguity in the Notification and it cannot be contended by the department that since there is an ambiguity, the Notification must be interpreted in favour of the department. 43. It also needs to be remembered that classification and assessment un....
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....Ministry in regard to eligibility of exemption notification or classification. We also note that the Ministry of Agriculture is not expert in classification of goods under the Customs Act, valuation, determination of duty or availability of benefit of exemption notification. They have rightly applied their mind from their point of view and felt that the exemption notification must be available to power tiller also. This view of the Ministry of Agriculture, cannot determine the eligibility or otherwise of the exemption notification to power tiller. It must be determined solely based on the way exemption notification as it is drafted. A bare perusal of the exemption notification, shows that it is available, inter alia, to rotary tiller/weeder. It does not suggest directly or indirectly that it is available to power tillers also. Therefore, in our considered view, the benefit of exemption notification is not available to the power tillers imported by the appellant." (emphasis supplied) 45. The learned special counsel appearing for the department placed reliance upon a decision of the Tribunal Collector of Customs, Madras vs. Pragati Computers Pvt. Ltd. [1997 (96) E.L.T. 34....