TaxTMI 
TaxTMI 
2026 (1) TMI 1403
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....in the instant ruling is 26.11.2024. The IEC of the applicant is 0514053739. The applicant is engaged in the business of manufacturing of mobile phones from its manufacturing unit situated in Noida and for the said purpose, imports various parts and equipment from Customs port at IGI Airport, New Delhi. 1. The applicant in their application, submitted as under :- 1.1 The Applicant intends to import the FPC Board for the manufacturing of smartphone from the manufacturing unit. FPC Board is used in various models having separate product IDs. However, the description and functionality of FPC Board remains the same, irrespective of product code and the model in which it is used. The detailed description of FPC Board intended to import is as follows: 1.2 Product Description FPC Board for which the preset Advance Ruling is sought is a Flexible Printed Circuit (FPC) for mobile phone antennas. FPC is made by etching the requisite pattern from the. Flexible Copper Clad Laminate (FCCL) foil which ensures efficient signal transmission and conductivity. The copper foil is affixed with a base layer of Polyimide (PI) covering film which allows the circuit to conform to the complicate....
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....CTA, applicability of a Notification, 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 classification of FPC Board under CTA. Accordingly, the present application is admissible in terms of Section 28H of the Act before this Hon'ble Authority. 1.6.2 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. 1.6.3 Further, Section 28E (b) of the Act defines 'advance ruling' as a written decision on questions referred to in Section 28H raised by the applicant in the application in respect of any goods prior to its importation. In the present case, the present application deals with the classification of the goods which are intended to be imported in the future under the proposed classification subject to the ruling of the Hon'ble Authority of....
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....dulate or amplify an electrical signal (for example, semi-conductor elements). 1.7.4 It is further submitted that the Explanatory Notes (Volume 5) to the Harmonized Commodity Description and Coding System (2022, Edition Seventh), ("HSN Explanatory Notes"), at page XVI-8534-1 explains the scope of HS Code 8534 as under: 85.34 - Printed circuits. In accordance with Note 8 to this Chapter, this heading covers the circuits which are made by forming on an insulating base, by any printing process (conventional printing or embossing, plating-up, etching, etc.), conductor elements (wiring), contacts or other printed components such as inductances, resistors and capacitors ("passive" elements), other than elements which can produce, rectify, detect, modulate or amplify electric signals, such as diodes, triodes or other "active" elements. Some basic or "blank" circuits may comprise only printed conductor elements generally consisting of thin uniform strips or wafers with, if appropriate, connectors or contact devices. Others combine several of the above elements according to a pre-established pattern. The insulating base material is generally flat but may also b....
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....lm circuits are created by depositing metallic and dielectric film patterns on glass or ceramic plates, while thick-film circuits involve screen printing on ceramic plates. Printed circuits may have holes or non-printed connecting elements for mechanical or electrical component mounting. However, circuits with mounted elements are not classified as printed circuits under this heading but are subject to classification in accordance with relevant notes in Section XVI or Chapter 90. 1.7.6 The above explanation squarely applies on FPC making it classifiable under CTH 8534. It conforms to the criteria specified in HSN Explanatory Notes as it involves creating a circuit pattern on FCCL through etching. The FCCL serves as the insulating base, and the circuit undergoes surface treatment with electric gold plating at the contact position. Additionally, the product's use of double-sided tape for assembly aligns with the characteristics of printed circuits. Consequently, the FPC falls within the classification outlined in CTH 8534, covering circuits formed on insulating bases through diverse printing processes and of different types. 1.8 In this regard, US Customs and Border Protect....
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....lements or for the connection of electrical components not obtained during the printing process." The ENs go on to state, "circuits on which mechanical elements or electrical components have been mounted or connected are not regarded as printed circuits within the meaning of this heading." The item concerned does incorporate non-printed connectors (an acceptable addition to a printed circuit of heading 8534). Those connectors would eventually be used to connect or mount mechanical or electrical components. At the time of import the item concerned does not possess such components. As such the item concerned is not excluded from classification within heading 8534. It is CBPs position that the flexible circuit is specifically described by heading 8534. As such classification within heading 8544, HTSUS, would be inapplicable. The applicable subheading for the flexible circuit assembly (PN-190896) will be 8534.00.0080, Harmonized Tariff Schedule of the United States (HTSUS), which provides for "Printed circuits: Other: Flexible type. " The rate of duty will be Free 1.11 Furthermore, the Hon'ble CEGAT, Madras in Collector of Customs, Bangalore vs Mini Circuits Ltd., 1998 ....
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....ses, classification shall be determined according to the terms of the headings and any relative Section or Chapter notes. The Heading 8517 covers telephone sets, smartphones and other telephones for cellular networks or for other wireless networks: other apparatus for the transmission or reception of voice, images or other data, including apparatus for communication in a wired or wireless network (such as a local or wide area network), other than transmission or reception apparatus of heading 8443, 8525, 8527 or 8528. However, in terms of Chapter Notes to Chapter 85, FPC will be classified under CTH 8534 and the same will take precedence over any other entry in the Schedule. Therefore, irrespective of the description of the heading in 8517, the subject Product being a FPC and being covered within the meaning of PCB, will be covered under CTH 8534 alone. 1.12.2 In this regard, in the case of Commissioner of Central Excise, Nagpur vs Simplex Mills Co. Ltd. [2005 (181) E.L.T. 345 (SC)], it is held that classification of a product is determined according to the terms of the Headings and any relative Section or Chapter Note. GRI 1 also provides that titles of Sections, Chapters and s....
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....inter alia, in Collector v. Delton Cables, 2005 (181) ELT 373, that Note 2(a) has to be exhausted first before applying Note 2(b). On application of Note 2(a), it is clear that goods falling under any sub headings of Chapter 85 is to be classified under the respective heading alone. Accordingly, where the subject goods are akin to description of CTH 8534, which falls under Chapter 85, no other entry relating to parts of mobile phone can be attracted to the same. 1.12.5 Further, Rule 3 (a) of the GI Rules lays down that the heading which provides the most specific description(s) shall be preferred to headings providing a more general description. CTH 8517 provides general description of telephone sets, smartphones and other telephones for cellular networks or for other wireless networks: other apparatus for the transmission or reception of vice, images or other data, including apparatus for communication in a wired or wireless network whereas, CTH 8534 provides for specific description of PCBs which under its scope covers an FPC. Therefore, relying on the above principle the specific description given under the CTH 8534 shall be preference over the general description given under....
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....to be taken into consideration for determining the classification of a product. For the purposes of classification, the relevant factors inter alia are statutory fiscal entry, the basic character, function and use of the goods. When a commodity falls within a tariff entry by virtue of the purpose for which it is put to, the end use to which the product is put to, cannot determine the classification of that product". 1.14 Therefore, in light of the above, it is submitted that FPC used for integrating components of Antenna will fall within CTH 8534 and stands excluded from the CTH 8517. 2. Comments of the Port Commissionerate- The comments from ACC(Import) Commissionerate, New Delhi were received on 04.03.2025, which are as follows :- The point wise comments to para (i) to (v) of the aforementioned letter issued by the CAAR, New Delhi is as under: (i) Eligibility of the applicant, in terms of Section 28-E (c) of the Customs Act,1962to seek such advance ruling Yes, M/s Vivo Mobile India Pvt. Ltd. is a valid applicant within the meaning of Section28E (c) (i) of the Customs Act, 1962, having IEC Code 0514053739. (ii) Applicability of proviso (1)....
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....forming on an insulating base, by any printing process (for example, embossing, plating-up, etching) or by the "film circuit" technique, conductor elements, contacts or other printed components (for example, inductances, resistors, capacitors) alone or interconnected according to a pre-established pattern, other than elements which can produce, rectify, modulate or amplify an electrical signal (for example, semi-conductor elements). The expression "printed circuits" does not cover circuits combined with elements other than those obtained during the printing process, nor does it cover individual, discreet resistors, capacitors or inductances. Printed circuits may, however, be fitted with non-printed connecting elements. C. Relevant Explanatory Notes are re-produced as under :- 85.34 Printed circuits. In accordance with Note 8 to this Chapter, this heading covers the circuits which are made by forming on an insulating base, by any printing process (conventional printing or embossing, plating- up, etching, etc.), conductor elements (wiring), contacts or other printed components such as inductances, resistors and capacitors ("passive" elements), othe....
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....ds viz. FPC Board, submitted by the importer, it appears that the goods viz. FPC Board play vital role in conducting/modulating of electrical signal ensuring continuous communication within the antenna system. This is features of the impugned goods has already been accepted by the importer. Further, as per Chapters notes/explanatory notes of CTH 8534, the following "Elements" are not covered :- "......... other than elements which can produce, rectify, modulate or amplify an electrical signal (for example, semi-conductor elements)" Further, due to above reasoning, it is understood that the importer itself was classifying the impugned goods under CTH 8517 7100 as the FPC Board, used in mobile phone antenna, are elements for conducting/modulating of electrical signal ensuring the proper functioning of Mobile Antenna. The sudden proposed change in the classification of the impugned goods, as proposed by the importer vide this Advance Ruling, cannot be seen befitting any logical explanation/reasoning. E. Hence, on perusal of Para B, C & D it is crystal clear that the impugned goods do not merit classification under CTH 85340000. F. Further C....
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....one. The nature of FPC Board being an unpopulated PCB and coupled with the fact that it does not actively transmit signals gets squarely covered under CTH 8534. c. As per HSN Explanatory Notes to CTH 8534, the FPC Board is classifiable under CTH 8534 inasmuch as, it involves creating a circuit pattern on FCCL through etching. The FCCL serves as the insulating base, and the circuit undergoes surface treatment with electric gold plating at the contact position. Additionally, the product's use of double - sided tape for assembly aligns with the characteristics of printed circuits. d. The following Rulings substantiate the claim of the Applicant: i. US Customs and Border Protection in its classification ruling, (US CROSS Ruling N302249 dated February 6, 2019). ii. US CROSS Ruling NY 184121 dated August 12, 2002. iii. Collector of Customs, Bangalore vs Mini Circuits Ltd., 1998 (101) E.L.T. 376 (Tribunal). e. It is evident from Section Note 2(a) to Section XVI that a part which is otherwise classifiable under Chapter 85, will be classified under its own heading and thus, cannot be classified in the generic entry of parts of mobile....
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....bases through diverse printing processes and of different types. v) Therefore, in view of the above, the contention of the Department that on account of exclusion of elements which can produce, rectify, modulate or amplify an electrical signal (semi-conductor elements), the product in question viz., FPC Board will not be classifiable under CTH 8534, is misplaced and contrary to their own admission that the FPC Board does not have any active elements. EARLIER CLASSIFICATION WOULD NOT OPERATE AS ESTOPPEL vi) The contention of the Department, that the Applicant itself was classifying the FPC Board under CTH 8517 and sudden change of classification of the FPC Board is without any logical explanation, is completely erroneous inasmuch as the said contention is contrary to the settled principles that there is no estoppel in Law against a party in taxation matters. In this regard, reliance is placed on: * Dunlop India Ltd. v. Union of India, 1983 (13) E.L.T. 1566 (S.C.) * Ford India Pvt. Ltd. v. Commissioner of Customs, Chennai, (2024) 24 Centax 20 (Tri .- Mad) * Well-Tech Packaging v. Commissioner of Central Excise, Meerut-II, (2024) 1....
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....gs: * In Re: Amazon Seller Services, (2023) 5 Centax.com 186 (AAR - Del) [Para. 8] * In re: Nikon India Pvt Ltd., (2023) 12 Centax 114 (A.A.R. - Cus. - Del.) [Para.9.2] * In Re: Spraytec India Ltd., 2022 (379) E.L.T. 521 (A.A.R. - Cus. - Del.) [Para.7, 9-10] * DRI (Hqrs.) v. Spraytec India Ltd, (2023) 4 Centax 211 (Del.) [Para 13- 14] * In re: Vivo Mobile India Private Limited, (2024) 15 Centax 406 (A.A.R. - Cus. - Del.) 4.1.6 Therefore, in view of the above, after the amendment the activity is not required to be proposed, and it is settled law that application for advance ruling is maintainable in case where the activity is on-going. 4.1.7 Further, in respect of merits, the FPC Board is categorically classifiable under CTH 8534 in terms of Note 8 to Chapter 85 and the corresponding HSN Explanatory Notes in as much as: * It is created on FCCL through etching. * The FCCL serves as the insulating base, and the circuit undergoes surface treatment with electric gold plating at the contact position. * No active elements are there on the FPC Board * Additionally, the product's use of double-sided t....
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....rter has presented the literature of the product and has countered the argument that FPCB has any active role in modulating electrical signals. They have contended that FPC does not amplify or modify the signals. As its role is not actively transmitting signals, it does not fall under chapter 8517 and on basis of its process of manufacturing and role in maintaining connectivity, it's squarely covered under Chapter 8534. Regarding change of existing classification, the applicant has quoted various case laws in their favour and has requested to decide the classification on basis of merit and without any basis to their earlier classification. 5.3 Thus, it appears that the issue involved is whether the impugned goods viz. "FPC Board" can merit classification under tariff item 8517 71 00 or 8534 00 00 of the Customs Tariff Act, 1975. In order to decide the same, it is imperative to examine both competing tariff items which covers following :- HS Code Level Item Description 8517 TELEPHONE SETS, INCLUDING SMARTPHONES AND OTHER TELEPHONES FOR CELLULAR NETWORKS OR FOR OTHER WIRELESS NETWORKS; OTHER APPARATUS FOR THE TRANSMISSION OR RECEPTION OF VOICE, I....
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....bossing, plating-up, etching) or by the "film circuit" technique, conductor elements, contacts or other printed components (for example, inductances, resistors, capacitors) alone or interconnected according to a pre- established pattern, other than elements which can produce, rectify, modulate or amplify an electrical signal (for example, semiconductor elements). The expression "printed circuits" does not cover circuits combined with elements other than those obtained during the printing process, nor does it cover individual, discrete resistors, capacitors or inductances. Printed circuits may, however, be fitted with non-printed connecting elements. Thin- or thick-film circuits comprising passive and active elements obtained during the same technological process are to be classified in heading 85.42." 5.3.2 The Note 2(a) of the Section XVI of the Tariff Act is reproduced below :- "2. Subject to Note I to this Section, Note 1 to Chapter 84 and to Note 1 to Chapter 85, parts of machines (not being parts of the articles of heading 8484, 8544, 8545, 8546 or 8547) are to be classified according to the following rules: (a) parts which are goods included in any of the....
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....ode sputtering or chemical methods. The patterns may be formed by deposition through masks or by deposition of a continuous sheet with subsequent selective etching. Thick-film circuits are formed by screen printing onto ceramic plates of similar patterns, using pastes (or inks) containing mixtures of powdered glass, ceramics and metals with suitable solvents. The plates are then furnace-fired. Printed circuits may be provided with holes or fitted with non-printed connecting elements either for mounting mechanical element. or for the connection of electrical components not obtained during the printing process. Film circuits are generally supplied in metallic, ceramic or plastic capsules which are fitted with connecting leads or terminals. Individual passive components such as inductances, capacitors and resistors obtained by any printing process are not regarded as printed circuits of this heading but are classifiable in their own appropriate headings (e.g., heading 85.04, 85.16, 85.32 or 85.33). Circuits on which mechanical elements or electrical components have been mounted or connected are not regarded as printed circuits within the meaning of ....
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....CL), wherein a copper foil layer functions as the conductive medium, laminated with a polyimide (PI) film to ensure mechanical adaptability to the spatial constraints of mobile devices; (iii) The FPC incorporates an adhesive backing for seamless assembly and features electroplated nickel-gold connectors to enhance conductivity and resist corrosion. 5.8 Critically, the FPC Board operates as a passive interconnect within the antenna system, serving solely to stable pathways establish electrical for signal transmission. It neither amplifies nor modulates signals, nor does it house active components. Its role is confined to facilitating signal continuity between antenna elements and the device's mainboard, devoid of any autonomous signal transmission or reception capabilities. 5.9. Based on the evidentiary record, it is incontrovertible that the FPC Board satisfies all essential criteria for classification under Heading 8534, as (i) it is fabricated by etching on an insulating base (FCCL); (ii) Lacks active signal-processing components; and (iii) remains unpopulated at the time of import. Conversely, the FPC's ancillary role in signa....