TaxTMI 
TaxTMI 
2026 (3) TMI 1598
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....ies Act, 1956, having their registered office at 10th & 11 Floor, Palm Springs Plaza (Complex) Village Wazirabad, Gurugram Haryana-122003, having Corporate Identification Number ("CIN") U74999HR2014FTC052934. 1.2 The Company holds Importer Exporter Code ("IEC") 0514053739 and is engaged in manufacturing cellular mobile phones/ smartphones. 1.3 Presently, the Company is clearing such imported goods ("display assembly used in manufacture of cellular mobile phone") from Customs port under Tariff Heading (CTH) 8517 of Customs Tariff Act, 1975 ("Customs Tariff Act") [Description: Telephone Sets, Including 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, more precisely 85177990 - Other]. 1.4 On the other hand, flat panel display assembly are classified under CTI 8524 [Description: Flat Panel Display Modules, Whether or Not Incorporating Touch-Sensitive Screens], CTI 85249....
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.... Workflow 1.10 AP sends the encoded image data packet through MIPI TX module. 1.11 DDIC receives the encoded image data packet through MIPI RX module, converts the digital signal into analogue signal, and decodes and extracts the effective image data. 1.12 The VESA decoder module decodes and decompresses the data compressed by the AP to obtain the original image data. 1.13 The IP module may perform the following processing on raw image data: color enhancement, gamut adjustment, color shift compensation, anti-aliasing compensation, and Mura compensation. 1.14 Gamma module receives image data, performs digital-to-analog conversion, and generates the corresponding grey scale voltage. 1.15 The Source Buffer module amplifies the grayscale voltage to generate source driving voltage (Source signal), charges the storage capacitor within each subpixel's pixel circuit, thereby individually controlling the brightness of RGB subpixels. 1.16 The Shift Register module generates gate driving signals (Gate signal), sequentially activates the charging control switches for each pixel row through row-by-row scanning and executes comprehensive charging operations across all pi....
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....gs. For the classification of flat panel display modules defined in this Note, heading 8524 shall take precedence over any other heading in the Nomenclature.] 1.21 From a perusal of the above Chapter Notes, it is clear that CTH 8524 must cover the following: * 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. * 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] 1.22 In relation to the above clarification provided vide Note 7 to Chapter 85, the Company would like to submit that it imports display assembly equipped with a driver IC, which has the function of converting video signals and can decode and convert data signals into analogue video signals. Therefore, the explanation provided in Note 7 of Chapter 85 shall take precedence while determining the classification of the goods being imported by the applicant. The above contention is also supported by Rule 1 of the Rules of Interpretation of the First Schedu....
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.... 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, 8529 or 8538 as appropriate.^2[However, parts which are equally suitable for use principally with the goods of headings 8517 and 8525 to 8528 are to be classified in heading 8517, and parts which are suitable for use solely or principally with the goods of heading 8524 are to be classified in heading 8529]; (c) all other parts are to be classified in heading 8409, 8431, 8448, 8466, 8473, 8503, 8522, 8529 or 8538 as appropriate or, failing that, in heading 8485 or 8548. 1.26 Moreover, the goods imported by the applicant includes proprietary MIPI ("Mobile Industry Processor Interface") protocols and has been specially perforated for the installation of an adapted camera. Thus, it is incompatible with other devices. 1.27 Accordingly, if a part (like display assembly) is specifically used in devices under HSN 8517 (smartphones) merit classification under CTH 8517 as a part used in manufacture of mobile phones and should be excluded from classification under CTH 8524. General Rules of ....
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....on shall be determined according to the terms of the headings and any relative Section or Chapter Notes and, provided such headings or Notes do not otherwise require, according to the provisions hereafter contained." Therefore, if there is no specific Chapter Note requiring otherwise, Rule 2 onwards including Rule 3(b) of the Rules for the Interpretation can be invoked. In the present case, Chapter Note 48 - 1(I) is very specific leaving no option to resort to Rule 3(b). We, therefore, hold that the Commissioner (Appeals) has committed an error in not taking into consideration Chapter 48 Note 1 (1) of the Schedule to the Central Excise Tariff and classifying the product under sub heading 4823.90. The product "Ice Cream Containers for Cones (known as Conical Containers)" is classifiable under sub- heading 7616.90 and not under 4823.90. The impugned order is, therefore, set aside and the appeals are accordingly allowed. 1.31 The Supreme Court in C.C.E. vs M/s Simplex Mills Co. Ltd. [(2005) 181 ELT 345] held that if Classification is possible under Rule 1, it will be followed; only if Classification is unsuccessful under Rule 1 following Rule will be applied. The Predominant Use....
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....and the most elementary rule of construction is that it is to be assumed that the words and phrases of legislation are used in their technical meaning if they have acquired one, or otherwise in their ordinary meaning, and the second is that the phrases and sentences are to be construed according to the rules of grammar. Krishi Utpadan Mandi Samiti vs. UOI (2004) 267 ITR 460 (All.) * If the language of the statute is clear and unambiguous, words must be understood in their plain meaning. The wordings of the Act must be construed according to its literal and grammatical meaning, whatever the result may be. While interpreting tax statute, the function of the court of law is not to give words in the statute a strained and unnatural meaning to cover and extend its applicability to the areas not intended to be covered under the said statute. Vidarbha Irrigation Devs. Corpn. vs. ACIT [(2005) 278 ITR 521 (Bom)] 1.35 In CCE Amritsar v DL Steels, [2022 SCC Online SC 863], the Supreme Court held that "a taxing statute should be construed in consonance with their commonly accepted meanings in common trade and popular sense. The Supreme Court also held that "The common parlance test....
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....th additional parts such as mechanics or other items/sub-assemblies, in form of an assembly, the whole assembly is liable to attract BCD at the rate of 15% as general parts of a cellular mobile phone under tariff item 8517 79 90'. It is pertinent to note that the HSN relied upon in the said Circular is 85177990. Accordingly, the goods being imported by the applicant merit classification under the said HSN. 1.40 Since the display assembly is specifically designed to work within a mobile phone and has no independent commercial use apart from such integration, it qualifies as a "part" of mobile phones. It contributes directly to the core function of the device and is inseparable from its intended purpose. 1.41 As mentioned above, a simple analysis of Note 2 of Section XVI reveals that parts which are 'goods', are required to be classified in the respective headings. In the present case display assembly, while being goods themselves, are not capable of independent function, but is a part of a mobile phone, and therefore it is classifiable under CTI 85177990 as their individual heading and not under 8524 (for reasons mentioned above supra). Since there is no unique HSN....
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....eemed necessary either before or at the time of personal hearing. 2. Comments of Customs Port Commissionerate: 2.1 As per the provision of CAAR Regulation, 2021, the complete application of the applicant was provided to the concerned Custom Port, and requested to furnish the requisite comments in the instant matter. The port authority vide their letter dated 25.09.2025 furnished their comments, which are reproduced as under: 2.2 In this regard, the comments of this group are as under: (i) Eligibility of the applicant, in terms of Section 28E(c) of the Customs Act, 1962 to seek such advance ruling: Yes, M/s Vivo Mobile India Pvt. Ltd. is a valid applicant within the meaning of Section 28F(c) of the Customs Act, 1962, having IEC Code 0514053739. (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- I(2) of Customs Act, 1962. (iii) Specify whether the claim of the applicant rega....
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....ng liquid crystal display (LCD), organic light-emitting diodes (OLED), light-emitting diodes (LED) or other display technologies. The screen types of flat panel display modules include, but are not limited to, those which are flat, curved, flexible, foldable, stretchable or roll able in form. This heading includes (1) Flat panel display modules without drivers or control circuits, which are generally referred to as cells. In the case of LCD cells, liquid crystals are placed between two sheets or plates of glass or plastics such as TFT substrates and colour filter substrates. In the cave of OLED cells, they have organic materials deposited on TFT substrates. Those cells do not contain electrical parts such as deters or control circuits, whether or not fitted with electrical connections or attached with polarizing plates. (2) Flat panel display modules with drivers or control circuits: Drivers or control which are added to cells of stem (1) The modules may contain drivers that receive videos signals or other data (e.g. text, images, ADP signals, or other graphical data) and switched individual pixels of displays (generally consisting of driver IC a....
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....are classified under this heading. However, flat panel display modules with video-converting components are excluded from this heading. As per sr. no. (a) of the exclusion list of the explanatory notes of heading 8524, flat panel display modules with video-converting components are usually articles of heading 8517, 8528 and 8529. Tariff Heading 8517 reads as: "Telephone sets, including 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 apparatus of heading 8443, 8525, 8527 or 8528" Tariff Heading 8528 reads as: "Monitors and Projectors, Not Incorporating Television Reception Apparatus, Reception Apparatus for Television, Whether Or Not Incorporating Radio-Broadcast receivers Or Sound Or Video Recording Or Reproducing Apparatus-Cathode-Ray Tube Monitors" Tariff Heading 8529 reads as: "Parts suitable for use solely or principally with the apparatus of headings 8525 to 8528" ....
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....ds for Active-Matrix Organic Light-Emitting Diode. It is a display technology that uses organic compounds to produce light when an electric current is applied. Each pixel in an AMOLED display consists of three sub-pixels (red, green, and blue) that emit light independently. The active matrix technology helps to control the light emission of each individual pixel, so as to achieve high-resolution and fast-response display performance. The "active-matrix" part refers to the thin-film transistor (TFT) backplane that controls each pixel. This allows for faster refresh rates and better control over individual pixels compared to passive-matrix OLED displays. Issue of classification: 4.3. I find that the applicant contends that the relevant entries for the subject goods as per Customs Tariff Act are 85177990 and 85249220. Therefore, I find that the competing entries are under Chapter 85 only. The issue for determination in the present application is confined to the correct tariff classification of the goods described as AMOLED display assembly, imported for use in the manufacture of cellular mobile phones/smartphones. Specifically, the question that arises for consideration is wheth....
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....tutory provisions, I am unable to find merit in the argument advanced by the Port Commissionerate on the issue raised in the present application. Thus, I find no force in the argument of the port Commissionerate. Now, I proceed to discuss the classification of goods under consideration on merit. 4.5. It is settled principle of law that the classification of any good under Customs Tariff Act, 1975 is governed by the General Rules for the Interpretation of the Import Tariff. Further, Rule 1 of GRI stipulates that "classification shall be determined according to the terms of the headings and any relative Section or Chapter Notes." It is only when the headings and notes do require otherwise then one may proceed to the subsequent rules. Therefore, the starting point is an analysis of the terms of the competing headings, 85177990 and 85249220 read with the relevant Chapter/Section notes. For the purpose of determining the correct classification of the impugned goods, it is imperative to examine Tariff Headings 85177990 and 85249220 in the proper context and statutory framework. The tariff heading 8517 under the First Schedule to the Customs Tariff Act, 1975, reads as under: HS Code....
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.... headings, it is essential to examine Note 7 of Chapter 85 of the Customs Tariff Act which provides the following: [7. "For the purposes of heading 8524, 'flat panel display modules' refer to devices or apparatus for the display of information, equipped at a minimum with a display screen, which are designed 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." 4.8. I observed that the Tariff Heading 8524 was introduced to provide a dedicated and specific classification for flat panel display modules, recognising their independent commercial identity and technological advancement. As p....
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....iver IC performing display-related signal handling does not, in my considered view, take the goods outside the scope of heading 8524. 4.13. I observe that the applicant has repeatedly claimed that the impugned AMOLED display assemblies are equipped with components for converting video signals, so as to attract the exclusion clause contained in Note 7 to Chapter 85. However, this claim remains a bare assertion. The applicant has not produced any contemporaneous technical evidence such as product catalogues issued by the manufacturer, detailed technical specifications, or any independent technical certification to demonstrate that the display assemblies, as imported, are in fact equipped with video-converting components of the nature envisaged in the said exclusion clause. In the absence of credible documentary proof establishing that the impugned goods are equipped with video-converting components which impart to them the character of goods of another heading, the exclusion clause of Note 7 to Chapter 85 cannot be invoked. Consequently, the applicant's claim seeking exclusion of the impugned goods from heading 8524 on this ground is rejected as unsubstantiated. 4.14. I not....
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....tive headings. Once classification is determined under Note 2(a), there is no occasion to proceed to Note 2(b), which applies only where Note 2(a) is inapplicable. Accordingly, the impugned goods, having a specific tariff entry, cannot be classified as parts of mobile phones under heading 8517 merely on the basis of end use. Accordingly, the applicant's reliance on Section XVI Note 2 and the "parts" principle to seek classification under CTI 85177990 is misplaced and cannot override the express and specific coverage under heading 8524. 4.17. Further, the applicant placed reliance on CAAR, Mumbai ruling in case of M/s Orpak Systems India Pvt. Ltd. in their support. I find that the facts of the present case are different from those of above mentioned case, so much as the product under question namely Fuel dispenser display boards/display screens (Indicator Panel as described by the applicant) was a display module comprising a Liquid Crystal Display (LCD) screen, Decoder Integrated Circuit (IC), and Processor IC for fuel pump. The presence of components such as the decoder IC and processor IC confers upon the product a character beyond that of a simple flat panel display module....