BEFORE THE AUTHORITY FOR ADVANCE RULINGS
( CUSTOMS & CENTRAL EXCISE )
NEW DELHI
P R E S E N T
Hon'ble Mr. Justice Syed
Shah
Mohammed Quadri (Chairman) |
Mr Somnath Pal
(Member) |
ADVANCE RULING NO. AAR (CUS)/03/2004
Application No. AAR/44/102/2004
Name & Address of the
applicant |
M/s Permalite Electricals (P) Ltd
E-73/74, Amar Colony, Lajpat
Nagar - IV, New Delhi-110 024 |
Commissioner concerned |
Commissioner of Customs (ICD),
New Delhi |
Present for the Department |
Shri P.K. Haldar
Deputy Commissioner |
|
Shri Sanjay Sharma,
Appraiser |
Present for the Applicant
|
Shri R. Venkataraman,
Director
Shri Balbir Singh,
Advocate
|
R u l i n g
( By Mr
Somnath Pal, Member )
M/s Permalite
Electricals (P) Ltd., (hereinafter referred to as the 'applicant') has filed an
application for advance rulings before the Authority for Advance Rulings
(Customs & Central Excise) (in short the "Authority") which was received in the
Authority's Office on 10/2/2004. The short question on which advance ruling has
been sought by the applicant is -
" Propose to manufacture
Compact Fluorescent Lamps. CFL are under Anti Dumping. Since in our case we
propose to import the coated tube with filament which would be component of CFL
and we desire advance ruling that the tubes as a components will not come under
Antidumping."
2. Our attention was
drawn by the applicant to the Notification No. 138/2002-Cus., dated
10/12/2002
by which anti dumping duty has been imposed on Compact Fluorescent Lamps (
hereinafter referred to as CFL ). The main thrust of the argument of the
applicant is that the anti-dumping duty has been imposed on CFL falling under
sub heading 8539.31 of the First Schedule to the Customs Tariff Act, 1975,
originating in or exported from People's Republic of
China and Hong Kong and
imported into India. As per the table attached to this Notification, anti
dumping duty will be leviable as an amount per unit in US Dollars as specified
in columns 4 and 5 of the Table corresponding to the two categories namely CFL "
without choke" and "with choke" respectively. The applicant's case is that they
propose to import coated tube with filament which is a component of CFL and not
CFL itself and therefore, this will not be covered by the language of the
Notification which clearly imposes anti dumping duty on CFL without choke or
with choke. According to the applicant, no anti-dumping duty will thus be
leviable on the item proposed to be imported by them. The jurisdictional
Commissioner while conceding that the item is not CFL as is understood in the
market has however, contended that the item has nevertheless acquired the
essential character of a CFL and therefore, by virtue of the Rules of
interpretation, Rule 2 (a) in particular, the item in question would be
classifiable as CFL and consequently the anti-dumping duty under this
Notification will be leviable thereon. The applicant contested the
Commissioner's views on the ground that the language of the Notification is
clear on this aspect and the item proposed to be imported by the applicant,
being a component of a complete CFL, would be specifically classifiable under
sub heading 8539 90 10 in sharp contrast to complete CFL which would be
classifiable under a different sub heading namely 8539 3110 and on which alone
the anti-dumping duty is leviable.
3. In order to
appreciate the point on which advance ruling has been asked for, it is necessary
to refer to the Notification No. 138/2002-Cus. dated 10/12/2002. A close reading
of this Notification reveals that having regard to the findings of the
designated authority which had proposed to impose definitive anti-dumping duty,
on all imports of CFL, except the exports of CFL, both with and without choke,
by M/s Phillips and Yaming, People's Republic of China, originating in, or
exported from People's Republic of China and Hong Kong, the Central Government
in exercise of powers conferred by sub-section (1) and (5)of Section 9 A of the
Customs Tariff Act, read with rule 18 and rule 20 of the Customs Tariff
(Identification, Assessment & Collection of Anti-dumping Duty on Dumped Articles
& for Determination of Injury ) rule, 1995, imposed by this Notification, " on
Compact Fluorescent Lamps falling under Chapter 85 of the First Schedule to the
said Customs Tariff Act, originating in or exported from the country specified
in Column (2) of the Table annexed hereto, when exported by exporter mentioned
against the corresponding entry in column (3) of the said Table, and imported
into India, an anti-dumping duty at the rate which is equivalent to the
difference between the amount mentioned in corresponding entries in column (4)
or column (5) of the said Table, and the landed value of the imports per unit in
US $". The Table referred to above is as under:-
TABLE
S.No. |
Country |
Name of the
Producer/exporter |
Amount per
unit in US $ |
|
|
|
Without choke |
With choke |
(1) |
(2) |
(3) |
(4) |
(5) |
1. |
Peoples Republic of China |
M/s Philip &
Yaming Lighting Co. Ltd. |
Not applicable |
Not applicable |
|
|
M/s Hangzhou Feihua Lighting
& Electrical
Appliance Co. Ltd.
(Through M/s CMEC Engineering
Machinery Import & Export
Co. Ltd.) |
1.256 |
1.845 |
|
|
|
|
|
|
|
All other exporters |
1.256 |
3.125 |
2. |
Hong Kong |
All exporters |
1.256 |
3.125 |
4. It is apparent from
the wordings of the Notification that anti-dumping duty has been imposed on CFL
( Compact Fluorescent Lamps )falling under Chapter 85 of the First Schedule to
the Customs Tariff Act (both without choke and with choke). It is not in
dispute that the applicant proposes to import the item in question from People's
Republic of China, the producer/exporter being other than those specifically
named in the column 3 of the table of the Notification and hence would be
covered under the heading " All other exporters". It is also not in dispute
that the item proposed to be imported by the applicant is without choke. The
moot point for consideration is therefore, whether the coated tube with
filament which the applicant is proposing to import can be treated as CFL
falling under Chapter 85 of the First Schedule to the Customs Tariff Act or
not.
5. The sample of the
item proposed to be imported by the applicant as submitted by them during the
hearing before us shows that it consists of two bent tubes joined together and
sealed at both ends having coating inside and with one pair of filaments fixed
at one of the two sealed ends of each of the two tubes. The applicant has
indicated the manufacturing process which they propose to undertake as per which
a CFL has 6 components namely:
(a) Sealed Coated tubes
with filament (imported)
(b) Plastic lamp base
(Material PBT) indigenous
(c) Populated PCB
Indigenous
(d) Lamp Base bottom
plastic (Material PBT) indigenous
(e) Metal Holder
indigenous
(f) Connecting wires
Indigenous
Out of the above, they
propose to import only (a) - sealed coated tubes with filament, while the rest
of the "components" would be indigenous. According to the applicant when all
these components are put together through a manufacturing process then only the
CFL comes into existence. They have also pointed out that the populated PCB
constitutes major portion in terms of value and technology in the CFL.
6. We observe that the
Notification 138/2002-Cus., dated 10/12/2002 being one which imposes duty needs
to be interpreted strictly. It is a settled law that taxing statute has to be
strictly construed and nothing can be read into it. The first paragraph of the
Notification specifically refers to import of CFL falling under sub-heading
8539.31 of the First Schedule to the Customs Tariff Act. It also indicates the
conclusions which the "designated authority" vide its preliminary findings had
drawn in the matter of imports of CFL into India from People's Republic of China
and Hong Kong. Even the final findings of the "designated authority" proposed
to impose definitive anti-dumping duty on all imports of CFL except the exports
of CFL, both with and without choke, by M/s Phillips and Yaming, People's
Republic of China, originating in or exported from Peoples Republic of China and
Hong Kong. With this background, the Central Government, on the basis of the
above findings of the "designated authority" imposed the anti-dumping duty on
"Compact Fluorescent Lamps falling under Chapter 85" subject to the details
specified in the Table in the Notification. It would therefore, be reasonable
to hold that the focus and the basis of imposition of anti-dumping duty are in
respect of an article which is Compact Fluorescent Lamps falling under
sub-heading 8539.31. It is a well settled rule of interpretation that in a
legislation relating to a particular trade, business, profession, art or
science, words having a special meaning in that context are understood in that
sense. The Hon'ble Supreme Court has consistently taken the view that, in
determining the meaning or connotation of words or expressions describing an
article in a tariff schedule, one principle which is fairly well settled is that
those words and expressions should be construed in the sense in which they are
understood in the trade by the dealer and the consumer. The reason is that it
is they who are concerned with it, and it is the sense in which they understand
it which constitutes the definitive index of legislative intention. From a
plain reading of the Notification under consideration it is apparent that
anti-dumping duty has been imposed on CFL in both forms namely with choke and
without choke. The Notification therefore, has clearly covered two different
stages of Compact Fluorescent Lamp system, one being CFL complete with choke and
the other being a stage before that namely CFL without choke. It has not gone
to cover any item which has not even reached the stage of being called CFL
without choke. There does not appear to be any doubt or dispute about the item
proposed to be imported by the applicant not being a CFL as is commonly
understood in the concerned trade or market. Samples of a typical CFL without
choke as normally available in the market, placed by the applicant as well as by
the representatives of the jurisdictional Commissioner before us during the
hearing, confirm this view. Therefore, it would be reasonable in our opinion to
conclude that the item proposed to be imported by the applicant and for which
the advance ruling has been sought, cannot be considered even as CFL without
choke as is commonly understood in the concerned trade or market and hence it
will not be covered by the Notification under consideration.
7. It has been
submitted before us on behalf of the jurisdictional Commissioner that the sealed
coated tube with filament which is proposed to be imported by the applicant has
acquired the essential character of a CFL and therefore, would be liable to
anti-dumping duty under this Notification. In support of their contention
reliance has been placed on Rule 2 (a) of the Rules of interpretation which
reads as under:-
" any reference in a heading
to an article shall be taken to include a reference to that article incomplete
or unfinished provided that, as presented, the incomplete or unfinished article
has the essential character of the complete or finished article. It shall also
be taken to include the reference to that article complete or finished ( or
falling to be classified as complete or finished by virtue of this rule),
presented unassembled or disassembled."
8. The "General Rules
for the interpretation", we observe, are of the Schedule to the Customs Tariff
Act and are an aid for deciding the proper classification of the goods under
different tariff heading/sub-heading in that Schedule which specifies the rates
at which duties of customs are to be levied under the Customs Act. The Schedule
does not impose the duty but only gives the rates. The Notification under
consideration on the other hand, imposes the duty on a specified article and
also prescribes the rate thereof. From a reading of Rule 2 (a) as quoted above,
it is apparent that it is in the form of a legal fiction introduced for the
limited purpose of classification of an incomplete or unfinished article
vis-à-vis any reference in a heading to an article in the Schedule. It cannot
be used to modify the physical identity of an article mentioned in the
Notification imposing a duty on that article which has to be interpreted
strictly. The Central Government imposed anti-dumping duty on CFL ( without or
with choke) through this Notification issued under section 9 A of the Customs
Tariff Act, 1975 and not on incomplete CFL (without or with choke). The
expression "Compact Fluorescent Lamps falling under Chapter 85" denotes two
distinct factors namely the specific identity of the article and its
classification under the Customs Tariff Act. Even assuming that by virtue of the
fiction of the interpretative Rule 2 (a), an incomplete CFL may become
classifiable under the same chapter/heading/sub-heading in the Schedule as that
of a CFL if the incomplete CFL has acquired the essential character of a CFL,
the article would be falling under Chapter 85. But this will not be enough to
bring it within the sweep of the Notification unless the article is a Compact
Fluorescent Lamp ( with or without choke ) as is commonly understood in the
related trade or market. The article proposed to be imported by the applicant
is evidently not CFL though may be classifiable under Chapter 85 of the First
Schedule to the Customs Tariff Act. The Notification in question nowhere
stipulates that the expression "Compact Fluorescent Lamps falling under Chapter
85" (without or with choke) would include incomplete CFLs falling under Chapter
85 if they have acquired the essential character of the complete CFLs ( without
or with choke ) to attract the imposition of anti-dumping duty. As has been
observed by the Hon'ble Supreme Court : * "The intention of the
legislature in a taxation statute is to be gathered from the language of the
provisions particularly where the language is plain and unambiguous. In a
taxing Act it is not possible to assume any intention or governing purpose of
the statute more than what is stated in the plain language. It is not the
economic results sought to be obtained by making the provision which is relevant
in interpreting a fiscal statue. Equally impermissible is an interpretation
which does not follow from the plain, unambiguous language of the statute.
Words cannot be added to or substituted so as to give a meaning to the statute
which will serve the spirit and intention of the legislature".
We are therefore, not in a
position to accept the contention put forth before us in this regard on behalf
of the jurisdictional Commissioner.
________________________________________________________
*
Mathuram Agrawal Versus State
of Madhya Pradesh
(1999) 8 Supreme Court Cases
667.
9. We are accordingly
of the view that the sealed coated tube with filament as per the sample produced
by the applicant before us proposed to be imported by them, is not a CFL as is
commonly understood in the concerned trade or market and therefore, it will not
be liable to anti-dumping duty under the Notification cited above.
10. The representative on
behalf of the jurisdictional Commissioner also raised a point that the
application filed by the applicant in this case is barred by Section 28-I (2)
(b) of the Customs Act 1962, in as much as the question raised in this
application is the same as in a matter already decided by the Appellate Tribunal
in its decision reported in 2004 (166) E.L.T.49 (Tri.-Mumbai) in the case of
Philips India Limited Versus Commissioner of Customs, Mumbai. We are unable to
appreciate the relevance of this contention at this stage since this could have
been a relevant point for examination at the time of deciding whether the
application should be allowed or rejected as required under Section 28-I (2) of
the Act. This point was not placed before the Authority at that stage and
having allowed the application in terms of Section 28-I (2) and then having gone
to the stage of examining the application for the purpose of pronouncing its
advance ruling, we do not find any justification for entertaining such a plea at
this stage. In any event the goods in that case are not identical with goods in
question.
11. Having given careful
consideration, we rule on the aforementioned question that anti-dumping duty
will not be chargeable on the said sealed coated tube with filament under the
Notification No. 138/2002-Cus. dated 10/12/2002.
Sd/
(Justice S.S.M.Quadri)
Chairman |
Sd/
(Somnath Pal)
Member |
Dated13-05-2004
F.No. AAR/44/102/2004
|