LCD Panels Imported as Liquid Crystal Device Panels, Attracts Nil Customs Duty: CESTAT Rules in Favour of Micromax Informatics [Read Order]

In the case of Micromax Informatics, the Delhi Bench of Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ) has held that liquid crystal display ( LCD ) Panels Imported as Liquid Crystal Device Panels and attracts nill Customs Duty. Further, allowed the appeal to raise alternative classification of LED/LCD TV Panels and Accessories.

The appellant/assessee is engaged in imports of various goods, including LED/LCD TV panels and accessories. During the relevant period of dispute from 2012 to 07.05.2015, the appellant imported LED/LCD TV panels by classifying them under Customs Tariff Item 8529 90 90 and claimed exemption of basic customs duty under Serial No. 432 of the Exemption Notification. The Notification was subsequently amended by notification dated 11.07.2014.

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The department was of view that the appellant was not entitled to exemption under the Exemption Notification and, therefore, issued a show cause notice dated 12.05.2017. The appellant filed a reply denying the allegations made therein. The basic issue that arose for consideration before the Principal Commissioner was whether the appellant was entitled to claim exemption under the Exemption Notification.

The Principal Commissioner examined whether the goods imported by the appellant were complete LCD TV panels or LED TV panels and found as a fact that as the benefit of the Exemption Notification is only available for complete LCD and LED TV panels, the goods imported by the appellant being not complete TV panels but open cell with the T-con Board, the benefit of the Exemption Notification would not be available.

The application has been filed by the appellant for addition of a ground in the Memorandum of Appeal by raising an alternative classification of the goods under CTI 9013 80 10. Customs Tariff Heading 9013 covers liquid crystal display ( LCD ), which is not covered by under any other heading, and so the disputed goods would LCD manufactured by sandwiching the liquid crystal layer between sheets of glass. These are cut to special shapes so that they can be used as display modules of TVs.

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The LCD Panels imported by the appellant are liquid crystal devices and are also known as liquid crystal device panels in common trade parlance. They would, therefore, be correctly classifiable under CTI 9013 80 10 attracting nil rate of duty.

The assessee contended that the classification of goods is a question of law and can be raised any stage. The appellant relied upon the judgment of the Supreme Court in Shri Rama Machinery Corporation (P) Ltd. vs. Collector of Customs.

The department contended that a new plea at the appellate stage should not be permitted unless it is deemed. Shri Mihir Ranjan, special counsel appearing for the department submitted that the application should be rejected. Further, contended that a new plea at the appellate stage should not be permitted unless it is deemed necessary for proper adjudication of the case.

It was submitted that the appellant had self-assessed the Bills of Entry under CTI 8529 90 90, but at the appellate stage they are seeking classification under CTI 9013 80 00, which would amount to re-assessment of the self-assessment done. It was pointed that this has been done without getting the original assessment order modified or getting the Bills of Entry amended under section 149 of the Customs Act or modified under section 154 of the Customs Act.

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It is clear from the aforesaid judgment of the Supreme Court that though Rama Machinery Corporation had claimed one classification before the adjudicating authority but had claimed an alternative classification before the Tribunal. This was not permitted by the Tribunal. This view of the Tribunal was not accepted by the Supreme Court and it was held the Tribunal should have permitted the appellant to raise this alternative classification.

In Diamond Cements, which examined whether the appellant could be permitted to raise an alternative plea about classification, the Tribunal observed that permission could be granted. In view of the aforesaid decisions of the Supreme Court and the Tribunal, it is not possible to accept the contention advanced by the learned special counsel for the department that the application should be rejected. The application is, accordingly, allowed. The appellant is permitted to raise the alternative classification of the goods under CTI 9013 80 10 by adding a ground for proper adjudication of the case.

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The two member bench of Justice Dilip Gupta ( President ) and C.J. Mathew ( Technical Member ) bserved that the appellant had self-assessed the Bills of Entry under CTI 8529 90 90, but at the appellate stage they are seeking classification under CTI 9013 80 00, which would amount to re-assessment of the self-assessment done. This has been done without getting the original assessment order modified or getting the Bills of Entry amended under section 149 of the Customs Act or modified under section 154 of the Customs Act.

While allowing the appeal, the Tribunal held that the appellant is permitted to raise the alternative classification of the goods under CTI 9013 80 10 by adding a ground.

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