TaxTMI 
TaxTMI 
2026 (2) TMI 1028
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....oms Tariff Schedule or otherwise. 2. The Applicant is importing Optical Sheet-Complex (BN61-20395A) and Optical Sheet-High Color BN61-20400A (hereinafter referred to as the "subject goods" or "Optical Sheets" collectively). 2.1 Function and Composition of the Optical Sheets The subject goods in question are composite optical sheets used in LED televisions, designed to recycle polarised light and direct luminance, thereby enhancing brightness, colour accuracy, viewing angles, and overall display efficiency while reducing power consumption. They are used in the back light assembly of an LED Television. The subject goods are a combination of three layers: a) Dual Brightness Enhancement Film (hereinafter referred to as "DBEF") layer b) Prism Layer (100um) c) Prism Layer (125um) 2.2 The following table gives an overview of the subject goods in question: Product Code Product Description Product Specification Reference Image BN61- 20395A OPTICAL SHEET- COMPLEX; 25Y QN70F 55INCH_C The Complex sheet is a combination of Prism sheet & DBEF Sheet; The Complex sheet, comprising a DBEF layer and two prism films, recycles unused polar....
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....s of any unmounted material. 3.2 The HSN explanatory Notes under CTH 9001 refer to polarising materials in sheets or plates as under: "(B) Polarising material in sheets or plates which consist of specially treated sheets or plates of plastics, or of sheets or plates in which a layer of "active" plastics is supported on one or both sides by other plastics or by glass. This sheet or plate material is cut to shape to make the polarising elements described at Item (6) below." The HSN Explanatory Notes also define the term, optical elements thus: "Optical elements are manufactured in such a way that they produce a required optical effect. An optical element does more than merely allow light (visible, ultraviolet or infrared) to pass through it, rather the passage of light must be altered in some way, for example, by being reflected, attenuated, filtered, diffracted, collimated, etc. Subject to the provisions set out above regarding optical elements of glass, this heading includes: (1) Prisms and lenses (including compound prisms and lenses assembled by means of anadhesive cement), whether or not with unfinished edges. (2) Plates and dis....
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....etc.) suitable for fitting to an apparatus or instrument. " It is therefore apparent that when the optical elements are fitted to a support or a frame ready for fitment to an instrument or apparatus, the optical elements are regarded as permanently mounted. Further the HSN Explanatory Notes under CTH 9001 make the following exception with respect to permanent mounting: "Optical elements with a temporary mounting provided solely for protection during transport are considered to be unmounted." It is therefore apparent that when the optical elements are mounted solely for purposes of protection during transport, they are not regarded as permanently mounted. In the case of the 'Optical Sheet-Complex', the two prism layers are permanently fixed to two PET film layers and are also permanently fixed to the DBEF layer. These two layers are therefore permanently mounted on each other indivisibly. This mounting is not for purposes of protection during transport. The complex optical sheet is also ready for fitment to a LED TV. Notwithstanding the fact that the DBEF sheet and the prism layers could be individually regarded as optical elements and classifiable under CTH 9....
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....under CTH 9002, the HSN Explanatory Notes under CTH 9002 state that fitting to a support of a frame and ready for fitment to an instrument or apparatus could be regarded as permanently mounted. 4.2 The relevant portion of the HSN Explanatory Notes under CTH 9002 in this regard are extracted below: "With the exception of ophthalmic lenses (which when mounted constitute spectacles, lorgnettes or the like of heading 90.04), this heading covers the articles referred to in Items (B), (C) and (D) of the Explanator; Note to heading 90.01 when in a permanent mounting (viz., fitted in a support or frame, etc.) suitable for fitting to an apparatus or instrument. " (emphasis supplied) 4.3 In the present case, the DBEF layer and the two prism layers as discussed supra, are mounted in such a manner into a composite / complex optical sheet that these two layers are indivisibly fitted to each other and ready for use in LED Televisions. Accordingly, the prism layer could be regarded as permanently mounted for purposes of CTH 9002.Further, there can be no dispute that the prism layer qualifies as an "optical element" as the prism layer would meet the definition laid down in ....
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....r from much smaller MiniLEDs. 2. Quantum Dot layer - As this white light passes through the Quantum Dot layer, each dot emits a specific colour (red, green, or blue) when it's energized. 3. Pure colours - Because the dots are so tiny and precisely tuned, the red, green, and blue they produce are exceptionally pure, resulting in more accurate colour reproduction. 4. Enhanced display - By combining these pure colours, the TV creates a wider colour gamut and more natural-looking images. The benefits of Quantum Dot technology 1. More realistic colours - A wider and more accurate colour range makes scenes look more lifelike. 2. Higher brightness - The ability to produce pure colours allows for greater brightness without washing out the picture. 3. Better energy efficiency - Because the light is used more efficiently, Quantum Dot TVs can achieve high brightness and colour accuracy with less power. 4. Improved HDR performance - High Dynamic Range (HDR) content appears more detailed in both bright highlights and deep shadows" 5.3 Accordingly, it could be seen that Quantum Dots are nanoparticles of semiconductor materi....
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....n image and sound recorders and reproducers, and parts and accessories of such articles. 5.6.2 The relevant portion under CTH 8529 is given hereunder for ease of reference: 85.29 - Parts suitable for use solely or principally with the apparatus of headings 85.24 to 85.28. 8529.10 - Aerials and aerial reflectors of all kinds; parts suitable for use therewith 8529.90 - Other Subject to the general provisions regarding the classification of parts (see the General Explanatory Note to Section XVI), this heading covers parts of the apparatus of the five preceding headings. The range of parts classified here includes : (1) Aerials of all kinds and aerial reflectors, transmission and reception. (2) Rotor systems for radio-broadcast or television-broadcast receiving aerials consisting essentially of an electric motor mounted on the aerial mast to rotate it and a separate control box to aim and position the aerial. (3) Cases and cabinets specialised to receive the apparatus of headings 85.25 to 85.28. (4) Aerial filters and separators. (5) Frames (chassis). 5.6.3 It is an admitted position that the subject....
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.... to Section XVI categorically excludes from the scope of that Section all "articles of Chapter 90". Thus, the applicability of Note 2 to Section XVI must be read as being expressly subject to Note 1. The Note 1 (m) to Section XVI reads as under: "1. This Section does not cover: ... (m) articles of Chapter 90;" 5.6.6 As discussed supra, the impugned goods are appropriately classifiable under CTH 9002 9000. Thereby, the two products in question will be excluded from Section XVI and hence from CTH 8529, by Note 1(m) to Section XVI.As the application of Note 2 for classification of parts under Section XVI is inter-alia subject to Note 1 to Section XVI and given the legal position that articles of Chapter 90 are excluded from Section XVI by Note 1 (m) ibid, classification of Optical Sheet-Complex (BN61-20395A and b) Optical Sheet-High Color BN61-20400A under CTH 8529 as identifiable parts of LED Television can be legally ruled out. Therefore, the subject goods cannot be classified under CTH 8529. 5.7 In light of the aforementioned submissions, the Applicant seeks to enter the following question for Advance Ruling, and its interpretation of the question w....
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....tion XVI, read with Note 3 to the chapter 90. That both of the products are covered under CTH 9002 and more specifically they merit classification under CTI 90029000. 7.2 Nobody appeared on behalf of the Department for hearing. Discussion and findings 8. I have considered all the materials placed before me in respect of the subject goods. I have gone through the submissions made by the applicant during the personal hearing. I proceed to pronounce a ruling on the basis of information available on record as well as existing legal framework. 8.1 At the outset, I find that the issue raised in the question in the Form CAAR-1 is squarely covered under Section 28H (2) of the Customs Act, 1962, being a matter related to classification of goods under the provisions of this Act. 8.2 Before deciding the issue, let me deliberate on the legal framework prescribed in Customs Tariff Act, 1975, Chapter/ Section notes along with HSN explanatory notes. As per Rule 1 of GRI, the titles of Sections, Chapters and sub-Chapters are provided for ease of reference only; for legal purposes, classification shall be determined according to the terms of the headings and any relative Section or C....
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....e polariser that increases brightness over the entire LCD viewing range. Featuring a multi-layer, polymeric optical film that manages the polarisation of light, DBEF captures and ulitilizes light normally lost to absorption in the bottom LCD polariser. DBEF recycles light that would normally be absorbed by the rear polariser. This increases the amount of light available for viewing the display. There is no dispute that the prisms and the DBEF layer are optical elements. The prism internally reflects the light before letting it pass through the layer. The prism layers also control the light direction and concentrate it forward, thus enhancing front luminance and visibility. The DBEF layer polarises and also enhances the light passing through it. Therefore, these prisms and DBEF layers can be regarded as optical elements for purposes of CTH 9001.As the DBEF layer is a polarising layer, the relevant HSN Explanatory Notes under CTH 9001 describe a polarising material in sheets or plates as follows: "(B) Polarising material in sheets or plates which consist of specially treated sheets or plates of plastics, or of sheets or plates in which a layer of "active" plastics is supp....
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....ed as sheet and plates of polarising material under heading 9001.20 but it is still an optical element whereas the DBEF layer reflects S-polarised light before it is absorbed by the LCD panel. Through repeated reflections, it allows approximately 40% of the S-polarised light to be reused, thus serves as a sheet of polarising material classifiable under heading 9001.20. 8.6. Now, I will discuss the classification of the Optical Sheet-Complex (BN61-20395A). The applicant submitted that the subject goods are a combination of a DBEF layer and two prism layers and there is no dispute that it is the prism layers that provide the product with its essential characteristic. In the case of the 'Optical Sheet-Complex', the two prism layers are permanently fixed to two PET film layers and are also permanently fixed to the DBEF layer. These two layers are therefore permanently mounted on each other indivisibly. This mounting is not for purposes of protection during transport. Since, the subject goods are composite goods therefore, the classification of the goods should be on the basis of principle function as per the Note 3 to Chapter 90. Note 3 to Chapter 90 is extracted below: ....
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....isions. Accordingly, the prism layer could be regarded as permanently mounted for purposes of CTH 9002.The applicant seeks classification under CTH 9002 on the basis that optical sheet complex is a composite sheet and the classification of the goods should be on the basis of principle function as per the Note 3 to Chapter 90. The relevant portion under CTH 9001 and 9002 are given hereunder for ease of reference: 90.01 - Optical fibres and optical fibre bundles; optical fibre cables other than those of heading 85.44; sheets and plates of polarising material; lenses (including contact lenses), prisms, mirrors and other optical elements, of any material, unmounted, other than such elements of glass not optically worked. 9001.10 - Optical fibres, optical fibre bundles and cables 9001.20 - Sheets and plates of polarising material 9001.30 - Contact lenses 9001.40 - Spectacle lenses of glass 9001.50 - Spectacle lenses of other materials 9001.90 - Other It could be seen that the heading 9001 covers inter-alia the following: a) sheets and plates of polarising materials, and b) prisms, mirrors and other....
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....ations. Composite machines or apparatus consisting of two or more machines or apparatus of different kinds, fitted together to form a whole, consecutively or simultaneously performing separate functions which are generally complementary and are described in different headings of this Chapter, are also classified according to the principal function of the composite machine or apparatus. The subject goods cannot be terms as a multi-function or composite machine or apparatus as Optical Sheet-Complex (BN61-20395A) comprises of DBEF layer and prism layer, assembled together to perform a single principal function i.e. conditioning backlight illumination in LED/LCD televisions by different principal/phenomenon of light. The individual layers perform complementary roles, resulting in a single principal function, namely conditioning of backlight illumination for television displays. The Optical Sheet- Complex does not perform multiple independent or alternative functions therefore cannot be terms as multi-function or composite machines/apparatus. So, the classification on the basis of principal function cannot be ascertained as : 1. As the goods are not composite or mul....
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....or mounted on the aerial mast to rotate it and a separate control box to aim and position the aerial. (3) Cases and cabinets specialised to receive the apparatus of headings 85.25 to 85.28. (4) Aerial filters and separators. (5) Frames (chassis)." This heading excludes : (a) Aerial masts (e.g., heading 73.08). (b) High-tension generators (heading 85.04). ... ... (h) Lenses and optical filters for television cameras (heading 90.02). From the above, it is clear that heading 8529 only excludes "Lenses and optical filters for television cameras (heading 90.02)" falling under chapter 90. Further, Classification of parts of machinery of Section XVI is governed by Note 2, extracted below: "2. Subject to Note 1 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 rule: (a) parts which are goods included in any of the headings of Chapter 84 or 85 (other than headings 8409, 8431, 8448, 8466, 8473, 8485, 8503, 8522, 8529, 8538 and 8548) are in a....
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....Quantum Dots are nanoparticles of semiconductor materials used to emit a light of a different colour when they are illuminated by white LED light. This sheet converts part of the blue LED light into pure red and green wavelengths through quantum dot emission. Thus, expanding the color gamut, improving color accuracy, and enhancing overall display brightness efficiency. Although quantum dots qualify as an optical element and presented in the form of sheet but it does not polarise the light therefore cannot be classified under CTH 9001.20. Also, no specific entry is given under CTH 9001. The applicant submitted that the Quantum Dot layer is permanently embedded in a polymer layer and protected by barrier films to block moisture and oxygen. Quantum Dot layer is fixed permanently on polymer layer and further fixed with a barrier film on the bottom and top. The applicant submitted that the arguments extended for Composite Optical Sheets on permanent mounting are equally applicable to the Optical Sheet-High Color BN61-20400A also. But it is pertinent to differentiate between the words "Mounted and embedded". The reference is made to the following dictionaries: Sr. No. Diction....
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....eadings. The range of parts classified here includes : (1) Aerials of all kinds and aerial reflectors, transmission and reception. (2) Rotor systems for radio-broadcast or television-broadcast receiving aerials consisting essentially of an electric motor mounted on the aerial mast to rotate it and a separate control box to aim and position the aerial. (3) Cases and cabinets specialised to receive the apparatus of headings 85.25 to 85.28. (4) Aerial filters and separators. (5) Frames (chassis). Further, Classification of parts of machinery of Section XVI is governed by Note 2, extracted below: "2. Subject to Note 1 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 rule: (b) other parts, if suitable for use solely or principally with a particular kind of machine, or with a number of machines of the same heading (including a machine of heading 8479 or 8543) are to be classified with the machines of that kind or in heading 8409, 8431, 8448, 8466, 8473, 8503, 8522, ....