Havells India wins: CESTAT Classifies MCPCBs as LED Components, Not Independent Lighting Fixtures [Read Order]

The New Delhi Bench of the Customs, Excise, and Service Tax Appellate Tribunal ( CESTAT ) ruled that Metal Core Printed Circuit Boards ( MCPCBs ) imported by Havells India Ltd. should be classified under CTH 85340000 as LED components, rejecting the customs department’s claim that they fall under CTH 94054090 as independent lighting fixtures.

Havells India Ltd., the respondent, had imported MCPCB 6349 Prideplus New 20W 5.8X1127 MM (CELZLX0760) for use in LED lamps and classified the goods under CTH 85340000, which attracted a NIL basic customs duty under Notification No. 24/2005.

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The customs department acting on intelligence inputs examined the consignment and alleged misclassification. The department argued that the goods were more appropriately classified under CTH 94054090, which applies to lighting fixtures and LED lights, and issued a show cause notice demanding differential duty of Rs. 6,83,995, along with interest and penalties.

The adjudicating authority upheld the department’s view, reclassifying the goods under CTH 94054090 and confirming the demand. The AA also imposed a penalty of Rs. 6,83,995 and ordered confiscation with an option to redeem the goods on payment of a fine of Rs. 2,00,000.

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Aggrieved by this decision, the appellant appealed to the Commissioner of Customs (Appeals), who ruled in its favor, restoring the original classification under CTH 85340000 and setting aside the penalty and confiscation order. The department, dissatisfied with this decision, filed an appeal before CESTAT.

The department relied on IGST Notification No. 1/2017-IT (Rate) dated 28.06.2017, which distinguishes between regular PCBs (CTH 8534) and MCPCBs (CTH 9405), arguing that MCPCBs, due to their heat dissipation properties, are specifically designed for LED applications.

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The appellant did not appear before the tribunal, nor did it file any arguments or objections. The two-member bench comprising Dr. Rachna Gupta (Judicial Member) and Hemambika R. Priya (Technical Member) observed that classification under customs law cannot be determined solely based on GST notifications and that the primary determining factor is the Customs Tariff Act, 1975.

The tribunal observed that the issue had already been adjudicated in favor of importers in similar cases like Crompton Greaves Consumer Electricals Ltd. v. Commissioner of Customs (NS-V) and Halonix Technologies Pvt. Ltd. v. Commissioner of Customs (NS-V), where MCPCBs were held to be classifiable under CTH 85340000.

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The tribunal ruled that MCPCBs are components used in LED lamps but are not independent lighting fixtures themselves. The tribunal explained that Chapter 85 covers printed circuit boards, including those with metal cores, and that Chapter 94 applies only to finished lighting products. MCPCBs require further assembly before they become functional lighting devices, so they cannot be classified under CTH 94054090.

To Read the full text of the Order CLICK HERE

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