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M/s. Secure Meters Ltd. v. Commissioner of Customs, New Delhi

Civil Appeal · Neutral citation not assigned (Civil Appeal No. 7526 of 2004)Decided 5 May 2015
Civil Appeal No. 7526 of 2004
Justice A.K. Sikri · Justice Rohinton Fali Nariman

Background

Secure Meters Ltd., a manufacturer of electricity meters, imported Liquid Crystal Displays (LCDs) along with LCD Modules from Hong Kong and sought customs clearance of the LCDs under Chapter Heading 9013.80 (attracting a Nil basic duty rate under a relevant exemption notification). Customs authorities instead classified the LCDs under Heading 9028.90 as "parts of an electricity meter," reasoning that the goods' invoices described them as parts of energy meters. This classification was upheld by the Commissioner and by CESTAT, leading to the present appeal before the Supreme Court.

Decision Breakdown

The Supreme Court examined the competing tariff headings and the Harmonized System Explanatory Notes, which specifically describe liquid crystal devices made of a liquid crystal layer sandwiched between glass/plastic sheets as falling under Heading 9013 as "other devices," unless they more specifically qualify as an article under another heading. The Court found that the LCDs in question fit squarely within this description and that the Tribunal's reasoning for classifying them instead as meter "parts" under 9028.90 was legally unsustainable. It accordingly allowed the appeal, set aside the orders of the authorities below, and held that the LCDs were classifiable under Chapter Heading 9013.80.

Lesson Learnt

In customs classification disputes, how an imported component is described on a commercial invoice (e.g., as a "part" of a finished product) is not decisive: classification instead turns on the tariff heading's own technical description and the internationally recognized Explanatory Notes for that heading.

Official source (sci.gov.in)View Judgment (PDF)

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