Circular No. 12 dated 3^rd February 1994

Representations have been received from the Consumer Electronics and TV Manufacturers Association that their member units who are engaged in the manufacture of black and white television sets (henceforth referred to as TV) have been asked to pay duty on black and white TV minus the picture tube. The process of manufacture of TV sets involves assembling of three main parts of TV sets, i.e. Cabinet and back cover, picture tube and chassis and populated circuit board. The process of assembly consists of filling control panel on cabinet, fixing of picture tube, and alignment of chassis and fixing of back cover.

2.     The matter relating to the classification/ excisability of various sub-assemblies emerging during the course of manufacture of TV has since been examined and it is observed that in trade, the Cabinet with chassis, speakers etc. (but without the picture tube) is trade, as sub-assembly, though the same has essential characteristics of a TV Thus by application of Rule 2 (a) of Rules of Interpretation of the Tariff, a sub-assembly of the nature mentioned above when cleared as such, has to suffer its duty liability at the rates applicable to a TV If such sub-assembly comes into being in an integrated factory and is used captively for making the final product, then duty will not be leviable on the sub-assemblies but will be charged at the rate applicable, when the TV is removed after completion of further manufacture.