In a recent ruling, the Mumbai bench of the Customs, Excise, and Service Tax Appellate Tribunal ( CESTAT ) ruled that imported liquid crystal devices under specific Customs Tariff Items 9013 80 10 are exempt from customs duty.
The assessee are an Original Equipment Manufacturer (OEM)/ Original Design Manufacturer (ODM) of Flat Panel Television (LCDs/ LEDs) since 1981, and for manufacture of the above goods have been importing Liquid Crystal Display (LCD) devices and various other components. Up to 01.02.2020, the appellants had classified the imported ‘Open cells’ under Customs Tariff Item (CTI) 9013 80 10 and parts of open cells under CTI 9013 90 10.
As a specific customs tariff item 8529 90 30 was created for ‘open cell’ in the Finance Act, 2020, the appellants have started classifying the imported goods under CTI 8529 90 30 and associated parts under CTI 9013 90 10.
Accordingly, the assessee had revised the classification in terms of the above amendments, by classifying ‘open cell’ under CTH 85.24 and associated parts of open cells under CTH 85.29. During the disputed period the appellants had imported ‘open cells’ and ‘associated parts thereof’ under two Bills of Entry (B/E) No. 9574139 dated 16.07.2022 and B/E No.2453614 dated 15.09.2022 and self-assessed by availing Customs duty exemption under Sl. No. 29 and 30 of Notification No.24/2005-Customs dated 01.03.2005, as amended.
Mr. V. Sridharan, representing the assessee, argued that the impugned goods, known as ‘open cells’, are undisputedly classifiable under CTH 85.24, a fact acknowledged by the Department. According to Note 7 of Chapter 85, all articles classified under 85.24 are considered as ‘devices’ or ‘apparatus’. Therefore, he claimed that an open cell qualifies as a ‘device’, and its application as a ‘liquid crystal display’ qualifies it as a ‘liquid crystal device’.
It was also claimed by the appellants that ‘open cells’ in as-imported condition/ as such can be used for manufacture of monitors falling under subheadings 8528.42, 8528.52, 8528.62, solely or principally used in automatic data processing system of heading 84.71 and therefore are eligible for exemption under Sl. No. 29 of Notification No.24/05-Customs dated 01.03.2005.
The bench considered view that the authorities below in reassessment of impugned goods under Section 17(5) ibid, are required to pass a reasonable order, which is of a speaking nature, conforming to the requirements of the definition of ‘assessment’ which include such ‘reassessment’
Hence, it was imperative that amongst other issues, tariff classification of imported goods and exemption or concession of duty under notifications issued under Section 25 ibid are required to be examined and determined in order to fulfill the requirements of reassessment in terms of Section 2(2) ibid.
The Tribunal considered the view that the impugned order passed by the Commissioner (Appeals) cannot be sustained on merits. However, further considered view that in order to examine the various issues of reassessment of impugned goods covered under the two Bills of Entry (B/E) No. 9574139 dated 16.07.2022 and B/E No.2453614 dated 15.09.2022 for deciding upon the eligibility to Customs duty exemption benefits under Sl. No. 29 and 30 of Notification No.24/2005-Customs dated 01.03.2005, as amended, the matter needs to be decided afresh in de novo proceedings by the original authority.
A two-member bench comprising S.K. Mohanty (Judicial Member) and M.M. Parthiban (Technical Member) emphasized the need for cooperation from the assessee with adjudication authorities. They urged the assessee to submit all relevant grounds presented in their appeal and allowed the submission of any additional points of dispute during the new proceedings.
The bench highlighted that the original adjudicating authority must consider these additional submissions and ensure a reasonable opportunity for a personal hearing before reassessing the impugned goods. Consequently, the appeals were allowed and sent back for de novo proceedings.
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