Gist: Specific Mention takes Priority over General ones, CESTAT Supports Reclassification of AC Remote Components

In a recent ruling of Customs, Excise & Service Tax Appellate Tribunal ( CESTAT )  West Zonal Bench at Ahmedabad, the tribunal confirmed the reclassification of AC remote components made by the appellant, stating that Specific mentions take priority over general ones. The Appellant M/s Elite Electronics has a manufacturing facility engaged in the manufacture of Remote Controls, Electronic Controllers; PCB Assemblies, which are supplied to various Air Conditioner manufacturing companies. Don’t Miss Out on Global Opportunities: Register for the Foreign Trade Programme Today The case concerned with the import of certain electrical components for the manufacturing process. Two speaking orders were passed by the Respondent, Deputy Commissioner of Customs, Ahmedabad, ICD, Khodiyar classified Bare PCB, LCD Display, LED Backlight, Line Cord, I.R.E.D LED under CTH 84159000 as “Parts of Air Conditioner and Parts of A.C. Remote System”. But the appellant refused to accept the classification determined by the department and paid the duty under protest and filed an appeal before the Commissioner of Customs, Ahmedabad. A Show Cause Notice ( SCN ) was issued to the appellant clubbing past bills of entry, proposing to re-classify all the imported goods as Parts of A.C. and Parts of A.C. Remote System. Advocates Alok Agarwal and .Prachit Mahajan, appearing for the appellant argued that separately presented electrical parts generally fall in one or  other of the headings of Chapter 85, unless incorporated with other parts of the machine, such goods are classified in those headings, even if designed for use solely or principally with a particular machine of this Chapter. Don’t Miss Out on Global Opportunities: Register for the Foreign Trade Programme Today The Assistant Commissioner ( AR  ) representing the respondent in response justified the imposition of confiscation and penalty as the imported items were classifiable under Customs Tariff Heading 84159000 as parts of Air Conditioning Machines/Air Conditioner Remote Handsets. The bench comprising Justice Somesh Arora and Raju observed the appellant engaged in manufacturing of remote control handset, PCB assembled after mounting are supplied to various Air Conditioner manufacturing companies. The remote control handsets use approximately 145 components in which 20 are imported by the appellant. The main item is unmounted or bare PCB and 19 other components brought out in fractal matrix are used for mounting. Don’t Miss Out on Global Opportunities: Register for the Foreign Trade Programme Today The department was of the view that the unmounted PCBs being specific items should be classified in Chapter Heading 84159000 of the Customs Tariff Act, 1975. The 2 items, Buzzer and LED were classified under Tariff Heading  84159000 and other items were and other items were classified under Chapter 85 of CTA by the party except silicone keypad, Zebra/Keypad and springs which were classified under Tariff Heading, 39269099, 40169990, 73209090 respectively. The Commissioner applied Rule 2A General Interpretative Rules ( GIR ) of HSN for treating the goods presented before Customs as unassembled or disassembled and the same were parts of AC being the main PCB and parts of Remote Control handsets. Don’t Miss Out on Global Opportunities: Register for the Foreign Trade Programme Today The appellants argued that the classification under CTH 85159000 of the items as sought by them is appropriate, As the “ sole and principal use” rule does not apply to parts which constitute an article covered by heading of Section Note 2, hence the  same shall be classified in their own appropriate heading. The bench upheld the classification done by appellant. And the appeal was accepted with modification of classifying the silicone keypad under 84159000.