Pranav B Prem

The Delhi Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has set aside an order by the Commissioner of Customs (Preventive), which had denied concessional customs duty on aluminium-based copper clad laminates used in the manufacture of Metal Clad Printed Circuit Boards (MCPCBs). The Tribunal reaffirmed that MCPCBs fall within the ambit of Printed Circuit Boards (PCBs) and that the impugned inputs qualify for the benefit of exemption under Serial No. 39 of Notification No. 24/2005-Cus dated 01.03.2005.

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The Bench, comprising Justice Dilip Gupta (President) and Mr. P. V. Subba Rao (Technical Member), relied on consistent legal precedent laid down by CESTAT itself and affirmed by the Supreme Court, holding that the exemption was wrongly denied by the department.

Background of the Case

M/s Arktron Electronics, the appellant, is engaged in the manufacture of PCBs. The dispute arose from the import of aluminium-based copper clad laminates through 23 Bills of Entry, for which the appellant claimed concessional duty under Serial No. 39 of Notification No. 24/2005-Cus. This entry provides exemption to all goods used in the manufacture of PCBs, provided the goods are classifiable under Customs Tariff Item (CTI) 8534 00 00 and the importer complies with the Import of Goods at Concessional Rate of Duty Rules.

The department, however, refused the benefit, contending that the imported goods were not PCBs or PCB inputs, but rather parts of lighting equipment. It sought to reclassify the laminates under CTI 9405 99 00, which covers parts of lighting and fittings, and thus outside the scope of the notification. Consequently, the Commissioner passed an Order-in-Original dated 26.09.2023, rejecting the claim for concessional rate and confirming the demand for differential customs duty along with interest and penalty.

Tribunal's Analysis and Findings

The Tribunal emphasized that the core issue was the correct classification of the imported aluminium-based laminates—whether they should fall under CTI 8534 00 00, as claimed by the appellant, or under CTI 9405 99 00, as asserted by the Department.

The Bench referred to the earlier rulings in Crompton Greaves Consumer Electricals Ltd v. Commissioner of Customs (NS-V) [Customs Appeal No. 86852 of 2021 decided on 09.09.2022] and Crompton Greaves Consumer Electricals Ltd v. Commissioner of Customs, Nhava Sheva-V [ Customs Appeal No. 85054 of 2022 decided on28.06.2023 ], where it had already held that MCPCBs are a type of PCB, and that the inputs used in their manufacture qualify for the benefit under the exemption notification. The Supreme Court, in November 2024, dismissed the Department’s Civil Appeal (Diary No. 28888 of 2024) against the Tribunal’s decision, stating: “There is a gross delay… and even otherwise, we see no good ground to interfere with the impugned order passed by the Tribunal… Civil Appeals are accordingly dismissed on the ground of delay as well as on merits.”

The CESTAT further relied on its recent ruling in Principal Commissioner of Customs, Preventive Commissionerate v. B.S. Electronics Pvt. Ltd [ Customs Appeal No. 55355 of 2023 decided on 30.04.2025], where it reiterated that: “MCPCBs are also PCBs… Laminates with metal cores used to manufacture MCPCBs fall within the scope of the exemption notification, regardless of whether they are classifiable under Chapters 74, 75, or 76.” 

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It was made clear by the Tribunal that metal-based composite laminates, including those predominantly composed of aluminium, are specifically covered under the exemption entry if they are used for PCB manufacturing. The mere fact that the material may also fall under another chapter due to its composition does not disqualify it from the benefit, provided its end-use is in PCB production and procedural conditions under the Rules are met. On the strength of binding precedents and the appellant’s compliance with procedural formalities, the Tribunal held that the reclassification by the Department was erroneous. The Order-in-Original dated 26.09.2023 was accordingly set aside, and the appeal allowed in full.

Appearance

Shri Anurag Kapur and Shri Kaushal Jaisalmer, Advocates for the Appellant

Shri Shiv Shankar, Authorised Representative of the Department

Cause Title: M/s. Arktron Electronics V. Commissioner of Customs

Case No: Customs Appeal No. 50013 of 2024

Coram: Hon’ble Mr. Justice Dilip Gupta [President], Hon’ble Mr. P. V. Subba Rao [Member (Technical)]