TaxTMI 
TaxTMI 
2025 (12) TMI 773
X X X X Extracts X X X X
X X X X Extracts X X X X
....he companies Act'1956 and are engaged in the business of manufacturing mobile phones from its manufacturing unit situated at Noida and for the said purpose, imports several parts and components which are used in the manufacturing of these mobile phones. The Applicant is holder of valid Importer Exported Code ("IEC"), granted under the Section 7 of the Foreign Trade (Development and Regulation) Act, 1992, making an application with respect to applicability of the Exemption Notification. 1.1. The applicant, vide the aforesaid application, has sought ruling on the question whether the subject goods are eligible for exemption under Sr. 6D of the Notification No. 57/2017 dated 30.06.2017 as amended by Notification No. 09/2024 dated 30.01.2024? 1.2. The applicant has interalia stated the following. 1.3. M/s. Vivo Mobile India Pvt. Ltd. ("The Applicant") is filing the present application under Section 28H of the Customs Act, 1962, ("the Act"), seeking advance ruling on the applicability of the Notification No. 57/2017 ("Exemption Notification") under Sr. No. 6D as amended by the Notification No. 9/2024 dated 30-1-2024 ("Amendment Notification") on the following Subject Goods:....
X X X X Extracts X X X X
X X X X Extracts X X X X
....eel Support Stainless Steel 73269099 40. SIM Card Tray Plectrum Stainless Steel 73269099 41. Rear Main Camera Module Gasket Stainless Steel 73269099 42. Camera Module Sleeve (Steel) Camera bracket Support Steel 73269099 43. Camera Module Sleeve Steel 73269099 44. Card Column Stopper/card pillar (plastic silicone) TF Card Cover Plastic Silicone 39269099 45. Side Keys Column Stopper Plastic 39269099 46. Front Cover Stopper Plastic Silicone 39269099 47. Diffusion Film/Waterproof Breathable Membrane Flash Diffusion Film Plastic 39219099 48. Photosensitive Diffusion Film Plastic 39219099 49. Waterproof Breathable Membrane Plastic 39269099 50. Diffusion Film Plastic 39219099 51. Vapor Chamber Vapor Chamber Stainless Steel 73269099 52. Light Lamp Shade(plastic) Infrared Fill Light Lamp Shade Plastic 39269099 53. Fill Light Lamp Shade Plastic 39269099 54. Flash Lamp Cover Plastic 39269099 55. Flash Lamp Cover Plastic 39269099 56. Fill Light Lamp Shade Plastic 39269099 ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....oods"), which are integral in the manufacturing of mobile phone and claiming reduced rate of duty of 10% under the Sr. No. 6D of the Exemption Notification as amended by the Amendment Notification. The Applicant has been importing the Subject Goods and has been classifying them under Chapter 39 and Chapter 73 of the Schedule to Customs Tariff Act, 1975 ("Tariff Act") as per their respective material. It is pertinent to note that there is no dispute on the classification adopted by the Applicant. The detailed description of the Subject Goods are as follows: DESCRIPTION OF PRODUCTS: 1.7. The Subject Goods are bifurcated in thirteen broad categories and all the products are either of plastic or of steel and accordingly are classifiable under Chapter 39 or Chapter 73 of the Schedule to the Tariff Act as per their respective constituent material. 1.7.1. Plastic Support Goods The Plastic Subject Goods are used for mechanical support function for various components of mobile phones. These products are made of plastic to perform fixed support function of limiting the displacement of the machine or equipment for the purpose of enhancing the stability and safety of the structure.....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... or a specialized refrigerant, is then introduced into the chamber. After sealing, the chamber is subjected to a controlled heat treatment process to ensure the proper distribution and absorption of the working fluid. The final step involves integrating the vapor chamber into the electronic device, where it effectively transfers heat away from critical components, ensuring reliable performance and longevity. 1.7.4. Plastic Protective Film and Diffusion Film/Waterproof Breathable Membrane: The protective films are made through a process that involves machines. First, the main material, often made from PET, TPU, or other durable plastics, is layered with a base film. A cutting machine then shapes the film to the desired size. The process includes aligning the materials and adjusting the machine to ensure smooth cuts. After cutting, the films are checked for quality and then manually inspected and packaged. These protective films are used on mobile devices, providing essential protection against scratches and fingerprints, making them reliable and effective for everyday use. 1.7.5. Shielding Case: The shielding case is a mechanical item produced through a systematic manufa....
X X X X Extracts X X X X
X X X X Extracts X X X X
....tion for prospective imports. Present Application is admissible in terms of the Act: 1.8. Section 28H of the Act entitles the Applicant to file an application for obtaining advance ruling on the question in respect of classification of goods under CTA or applicability of a notification or principles to be adopted for valuation of goods under the Act or determination of origin of goods. In the present case, the applicant has made the present application raising questions of applicability of the Notification on the Subject Goods. Accordingly, the present application is admissible in terms of Section 28H before this Hon'ble Authority. 1.8.1. It is submitted that none of the restrictions under the proviso to Section 28-I (2) are applicable, inasmuch as the questions raised in the present application are not pending or decided in any proceedings in the case of the Applicant. Therefore, it is submitted that the present application ought to be admitted under Section 28-I (2) of the Act. Subject Goods are eligible for applicability of the exemption under the Exemption Notification: 1.9. Subject Goods are covered under the scope of Mechanical Items. 1.9.1. It is submit....
X X X X Extracts X X X X
X X X X Extracts X X X X
....chanical appliances and goods have also been subject matter of final order passed in Principal Commissioner of Customs, New Delhi (ACC Import) v. M/s. Aptar Pharma India Pvt. Ltd., 2024 (3) TMI 139 - CESTAT New Delhi, wherein while dealing with the issue whether pump for lotion dispenser can be termed as mechanical appliances, the Hon'ble Tribunal observed as follows: 5.4 Pump is definitely a mechanical appliance. According to the Dictionary meaning, mechanical appliances are the tools that held with everyday task i.e. the appliances which are related to mechanics i.e. the branch of physics that deals with forces acting on mass. There is no dispute about the product/pump in question that pressure is used on the impugned product to get the lotion in the container beneath the product, to disperse out. Thus, we hold that product in question is a mechanical appliance performing two functions based on simple mechanics: (i) Transporting liquid from the container to which the product gets attached. (ii) Dispersing the lotion in the said container to the given surface. 5.5 We observe that the section note of 8424 talks about mechanical appliances mea....
X X X X Extracts X X X X
X X X X Extracts X X X X
....isplacement of the machine or equipment for the purpose of enhancing the stability and safety of the structure. The steel support products are manufactured with the help of machines wherein sheet of steel is run through various mechanical processes such as punching, screen printing, drying and stamping to give a particular shape to make the final supporting product. Thus, it is clear that firstly, these products are manufactured using machines and mechanical equipment. Secondly, these products are used for providing stability and support and as such, use forces acting on mass. Therefore, the Steel Subject Goods are covered within the meaning of 'mechanical items'. 1.9.7.3. Steel Vapor Chamber: The Vapor Chamber is a temperature chamber which is a two- phase flow product mainly composed of upper and lower cover plates, and a middle capillary layer. The main function of Steel Vapor Chamber is to evenly disperse the local high temperature of the electronic product through the heat exchange between the internal liquid and gas, to reduce the temperature of the heat source, and thus achieve the purpose of reducing the temperature of the entire product. Thus, the product is man....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ptical grade materials like PMMA and PC for their clarity and precision. High-precision CNC machines are then utilized for optical mold processing, ensuring exact specifications, followed by product injection molding, where both single-color and two-color components are formed using advanced injection molding machines that guarantee precise dimensions. The assembly process incorporates laser technology for high-accuracy marking and bonding of auxiliary materials. Thus, it is clear that firstly, these products are manufactured using machines and mechanical equipment. Secondly, these products are used in enhancing lighting effects and visual performance in devices like cameras and lighting systems. Therefore, the Plastic Optical Products are covered within the meaning of 'mechanical items'. 1.9.8. Therefore, in view of the above, the Subject Goods being manufactured by machine are falling under the scope of mechanical items and are being used for the manufacturing of mobile phones and resultantly are eligible for claim of exemption under the Sr. No. 6 of the Exemption Notification as amended by the Amendment Notification. 1.10. The Subject Goods are Mechanical Items in ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....r the expression. In Maharashtra Fur Fabrics (supra) it is held that: 6. A careful reading of the proviso to the notification would show that by resorting not only to the process of bleaching, dyeing, printing, shrink proofing, tentering, heat-setting, crease-resistant processing, but also to "any other process or any two or more of these processes", the respondent would lose the benefit of the exemption. It is a well-established principle that general terms following particular expressions take their colour and meaning as that of the preceding expressions, applying the principle of ejusdem generis rule, therefore, in construing the words "or any other process", the import of the specific expressions will have to be kept in mind. It follows that the words "or any other process" would have to be understood in the same sense in which the process, including tentering, would be understood. Thus understood, a process akin to stentering/tentering would fall within the meaning of the proviso and, consequently, the benefit of the notification cannot be availed by the respondent. 1.10.4. In this regard, in Commissioner of Trade Tax, U.P. vs. Kartos International2011 (268) E.L.T.....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... (a) tangible assets, being buildings, machinery, plant or furniture; (b) intangible assets, being know-how, patents, copyrights, trademarks, licences, franchises or any other business or commercial rights of similar nature. Explanation 3 states that the expression "asset" shall mean an intangible asset, being know-how, patents, copyrights, trademarks, licences, franchises or any other business or commercial rights of similar nature. A reading of the words "any other business or commercial rights of similar nature" in clause (b) of Explanation 3 indicates that goodwill would fall under the expression "any other business or commercial right of a similar nature". The principle of ejusdem generis would strictly apply while interpreting the said expression which finds place in Explanation 3(b). 9. In the circumstances, we are of the view that "goodwill" is an asset under Explanation 3(b) to Section 32(1) of the Act. 1.10.6. Therefore, in the above rulings, it is clear that any item which is produced or manufactured by applying machinery can be understood as a mechanical item. In the present case, all the products specified in entries (i) to (x) have ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....at the Exemption Notification has expressly exempted the mechanical items falling under the said chapters and are used in the manufacturing of cellular mobile phones. In the present case, Subject Goods are covered under Chapter 39 and Chapter 73 of First Schedule to the Tariff Act and thus are eligible for the benefit under the Exemption Notification. 1.11.4. Therefore, in light of the above, it is submitted that the Subject Goods which are covered under the scope of mechanical items classified under Chapter 39 and Chapter 73 of the Schedule I to Tariff Act are imported for manufacturing of mobile phone are eligible for benefit under the entry 6D of the Exemption Notification. PRAYER 1.12. In light of the foregoing, it is respectfully prayed that the following Ruling may kindly be given: a. Subject Goods are eligible for exemption under Sr. No. 6D of the Notification No. 57/2017 dated 30.06.2017 as amended by Notification No. 09/2024 dated 30.01.2024. 2. Comments of Customs Port Commissionerate: 2.1 As per the provisions of CAAR Regulation, 2021, the complete application of the applicant was provided to the concerned custom port, i.e. Customs Air Crago Compl....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... Support Plastic 39269099 2 Volume Buttons fixed Support Plastic 39269099 3 Antenna Support Plastic 39269099 4 Receiver Support Plastic 39269099 5 Camera Module Decorative Ring Support Plastic 39269099 6 Support Plastic 39269099 7 Flashlight Support Plastic 39269099 8 Camera Module Support Plastic 39269099 Fixed Support Plastic 39269099 10 Power Button Support Plastic 39269099 11 Power Button fixed Support Plastic 39269099 12 Support Plastic 39269099 13 Earphone Socket Support Plastic 39269099 14 Power Button Switch Support Plastic 39269099 15 BTB Support Plastic 39269099 16 Side Keys Support Plastic 39269099 17 Side Keys Fixed Support Plastic 39269099 18 Side Keys FPC Fixed Support Plastic 39269099 19 Keys Support Plastic 39269099 20 AI Button Switch Support Plastic 39269099 21 Flash Lamp Cover Support Plastic 39269099 22 Card Column Stopper/card pillar (plastic silicone) TF Card Cover Plastic Silicone 39269099 ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....;mechanical' to encompass "purely optical films", "protective membranes", and "static light guides" that perform no mechanical function whatsoever. The term "mechanical" in its ordinary meaning refers to items that involve machinery, moving parts, structural support, or physical manipulation of components. It does not encompass all plastic articles used in manufacturing but only those plastic items that perform mechanical functions within the mobile phone assembly process. 2.3.4. Upon careful examination of the 44 items listed in Table-A of, several categories clearly fall outside the scope of "mechanical items of plastic." Items 25-28 comprising various diffusion films, photosensitive diffusion films, and waterproof breathable membranes are essentially optical and protective components that perform filtering, light management, and moisture control functions rather than mechanical operations. Item 27 (Waterproof Breathable Membrane) serves a sealing function based on material properties rather than mechanical action. Items 42-44 including protective films for screens and BTB protective films are purely protective coverings that do not involve any mechanical operation or stru....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ing IEC Code 0514053738. 3(ii) Applicability of proviso (1) of section 28-1 (2) of the Customs Act, 1962 regarding the question raised in the application: As per records available in the Section, no such case of the applicant is pending with any officer of the Customs, other Appellate Tribunal or any Court as per proviso of Section 28(1) (2) of Customs Act, 1962. 3(iii) Please specify whether the claim of the applicant regarding the nature of activity, i.e. it is ongoing/proposed is correct: As per available records, Importer's claim regarding the nature of activity i.e. it is ongoing is correct. 3(iv) Comments on merit: In this regard, the detailed reply for the items pertaining to this group i.e. CTH 73 is as per Annexure-l enclosed herewith. 3(v) Whether the question raised is pending before any Officer of Customs, the Appellate Tribunal or any Court: As per records available in the Section, no such case of the applicant is pending with any officer of the Customs, other Appellate Tribunal or any Court as per proviso of Section 28(I) (2) of Customs Act, 1962. 2.10 Annexure-I in the form of table below. 2.10.1 Description of the Goods ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....Stainless Steel" used in manufacturing of cellular mobile phones. The word "mechanical" here is not merely descriptive but constitutes a qualifying condition that must be satisfied for availing the exemption. 2.10.2.1 The absence of any statutory definition of 'mechanical' in the Customs Act, 1962, Customs Tariff Act, 1975, or WCO Explanatory Notes necessitates reliance on the ordinary dictionary meaning of the term. In established customs jurisprudence, particularly under Chapter 84 of the HS which covers 'machinery and mechanical appliances, the term 'mechanical consistently refers to items involving machinery, moving parts, or mechanical action. Courts have emphasized that customs terminology must be interpreted holistically within the overall scheme of the Act rather than in isolation, making it legally untenable to stretch the term 'mechanical' to encompass "Vapor Chamber" and "shielding case" that perform no mechanical function whatsoever. The term "mechanical in its ordinary meaning refers to items that involve machinery, moving parts, structural support, or physical manipulation of components. It does not encompass all plastic articles used in man....
X X X X Extracts X X X X
X X X X Extracts X X X X
....rds of the Personal Hearing: Personal hearing in the matter was conducted through virtual mode on 11.08.2025. During the course of personal hearing, the authorized representatives of the applicant i.e. Sh. Kishore Kunal reiterated submissions made in their application. Further, AR requested the Authority to grant two weeks time for additional submission in view of the point raised during the personal hearing regarding the term "mechanical" used in the said notification, same was allowed by the Authority. No one appeared from the concerned customs port. 4. Additional Submission: The applicant vide letter dated 20.08.2025, has submitted the following additional submission. The same is reproduced as under: 4.1. M/s Vivo Mobile India Pvt. Ltd. ("the Applicant") is a company incorporated under the laws of India and having an Importer Exporter Code ("IEC") No. 0514053738. The Applicant is engaged, inter alia, in the business of manufacturing mobile phones from its manufacturing unit situated at Noida (Uttar Pradesh) and for the said purpose, imports several parts and components to manufacture mobile phones. 4.2 The Applicant has filed the instant application under Section ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....appliance. 4.3.2. In the Applicant's case, as is evident from the description of Subject Goods, the said subject goods are manufactured using machines and mechanical equipment, and also are used for providing stability and support and are therefore, using forces acting on mass. Thus, the Subject goods manufactured by machines fall under the scope of mechanical items and are used for mobile phone manufacturing, making them eligible for exemption under Sr. No. 6D of the Exemption Notification as amended by the Amendment Notification. Subject goods are mechanical items in light of the other items specified in the Exemption Notification. 4.4. Sr. No. 6D of the Exemption Notification provides the benefit of a reduced rate of BCD to "the goods for use in manufacture of cellular mobile phones". Further, the said goods have been defined in entries (i) to (x) of Sr. No. 6D, while entries (xi) and (xii) use the term "other mechanical items". Therefore, the meaning of 'mechanical items' to claim exemption has to take colour from the products specified in entries (i) to (x) of the Sr. No. 6D of the Exemption Notification by applying the principles of ejusdem generis. 4.....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... this purpose which has to be prioritised while deciding exemptions. In the Applicant's case, the Subject goods are being used for manufacturing the cellular phones. Therefore, the function of Subject Goods is consistent with the objection of Exemption Notification, i.c., to exempt such mechanical items which are used in the manufacturing of cellular mobile phones. 4.10. Therefore, in light of the submissions made hereinabove, it is respectfully prayed that a Ruling be given stating that the Subject Goods are eligible for exemption under Sr. No. 6D of the Notification No. 57/2017 dated 30.06.2017 as amended by Notification No. 09/2024 dated 30.01.2024. 5. Discussions, Findings and Conclusion: 5.1 Having examined the CAAR-1 application, the comments received from the jurisdictional Customs Commissionerate, the record of personal hearing, additional written response of the applicant and the applicable legal framework, I find the application to be valid in terms of the Customs Act, 1962 and the CAAR Regulations, 2021. I, therefore, allow the application in terms of Customs Act & CAAR regulations and proceed to determine the applicability of relevant notification for the p....
X X X X Extracts X X X X
X X X X Extracts X X X X
....re. Consequently, the general terms "other mechanical items" in entries (xi) and (xii) must be interpreted in the same light, i.e., to include items that share the essential characteristic of being manufactured by machines and performing a mechanical function, irrespective of their specific use. 5.4.2 Lastly, I note that the applicant advocates for a purposive interpretation, citing CC vs. Rupa and Co. Ltd., stating that the object of the notification is to grant exemption to goods used in the manufacture of mobile phones. Since the subject goods are essential for this purpose, denying the benefit would defeat the notification's intent. 5.5 On the other hand, I note that the Department contested the classification of all items as "mechanical." They submitted that the term "mechanical" is a qualifying condition and cannot be stretched to include all plastic or metal articles used in manufacturing. Crucially, the department highlights that the term "mechanical" in customs jurisprudence, particularly under Chapter 84 of the Customs Tariff Act which deals with 'machinery and mechanical appliances,' consistently refers to items involving machinery, moving parts, or mec....
X X X X Extracts X X X X
X X X X Extracts X X X X
....elevant here are (xi) other mechanical items of plastic; and (xii) other mechanical items of metal. It is noticed that the term "mechanical items" are not defined in the notification or the Customs Act/ Customs Tariff. I find that while the applicant's reliance on general dictionary meanings has some merit, the interpretation of a fiscal statute, especially an exemption notification, must be contextual and aligned with the scheme of the legislation. The department's argument that the term "mechanical" in the context of the Customs Tariff carries a specific connotation is persuasive. Chapter 84, which is titled "Nuclear Reactors, Boilers, Machinery and Mechanical Appliances; Parts thereof," typically covers items that involve defined mechanical principles, such as the use of moving parts, application of force, or transformation of energy. A pump, as in the Aptar Pharma case, is a quintessential example of a mechanical appliance. Extending this principle to all items manufactured by machines or providing passive support would be an overstretch. A "mechanical item" must possess an inherent quality of performing a function through a mechanical action or principle, not merely be....
X X X X Extracts X X X X
X X X X Extracts X X X X
....s of goods (e.g., "mechanical items" under 6D, "films" under 6F). Interpreting "mechanical items" to subsume all other categories would render the specific entries redundant, violating the settled principle of statutory interpretation that every word in a statute must be given meaning. Based on the above reasoning, I proceed to evaluate the subject goods in the following categories: 5.6.5 Category A (Items that QUALIFY as "Mechanical Items"): These items are analogous to the specific list, serving as essential structural, fastening, or housing elements. (i) Plastic and Metal Supports, Brackets, and Fixed Supports: (e.g., Main Board Support, Antenna Support, Camera Module Support, Various Button Supports, BTB Support, USB Socket Fixed Support). These function as internal "chassis" or "frames," directly analogous to the structural role of the covers and sockets listed in (i) to (ix). (ii) Stoppers: (e.g., Card Column Stopper, Front Cover Stopper). These function as mechanical limits and positioning aids, similar in function to gaskets or sockets in ensuring components fit correctly. (iii) SIM Card Tray Hole Pushrod: This is a direct mechanical interface ....