2006(09)LCX0209

IN THE CESTAT, SOUTH ZONAL BENCH, BANGALORE

Dr. S.L. Peeran, Member (J) and Shri T.K. Jayaraman, Member (T)

Commissioner of Customs, Bangalore

Versus

Acer India Ltd.

Final Order No. 1532/2006, dated 13-9-2006 in Appeal No. C/135/2005

Advocated By -

S/Shri K.S. Venkatraman, Considtant and K. Shri Anil Kumar, JDR, for the Appellant.
Shri G. Shiva Dass, Advocate, for the Respondent.

[Order per : S.L. Peeran, Member (J) (Oral)]. -

This Revenue appeal arises from OIA No. 153/2004-Cus., dated 28-12-2004 by which the Commissioner (Appeals) has set aside the assessment order of the Assistant Commissioner of Customs, Air Cargo Complex, Bangalore, in respect of Bill of Entry No. 687308, dated 24-9-2004 with regard to classification of Laptop Computers. The department, in the instance case, decided that the Note book Computers are "CPU with Monitor, mouse and key board imported together as a set" and classified the same under SI. No. 2 of the Tables in Rule 2 of the Computer (Additional Duty) Rules, 2004 and subjected the goods to an additional duty of 7%. The assessee paid the duty under protest and aggrieved with the Assessment Order and filed an appeal before the Commissioner (Appeals). They contested that the said Rules are not applicable to Laptop Computers as the item is different. The display key, key board, mouse, modem everything are integrated in the Laptop and hence, Computer (Additional Duty) Rules, 2004 is not applicable to Laptop computers. It was submitted that the Laptop computers are classifiable under CH 8471 and are exempted from additional duty. The Commissioner (Appeals), after due consideration, accepted their submission and the findings recorded in Para 6 to 8 are reproduced herein below :-

"6. I have examined the facts of the case and also taken into consideration the submissions made in writing to the Department by the Appellants and the averments made at the time of personal hearing. The appellants M/s. Acer India Pvt. Ltd., Bangalore, have against B/E No. 687308 dt. 24-09-2004, have imported 36 pes of Note Book computers, commonly known as laptop computers in variance to the desktop computers. The Dept. while assessing the goods have classified the same as "CPU with monitor, mouse and key board together as a set" and have levied Additional Duty at 7% under the Computer (Additional Duty) Rules, 2004. I observe that SI. No. 2 of the table in Rule 2 of the Computer (Additional Duty) Rules, 2004, reads as :

"CPU with monitor, mouse and keyboard imported together as a set; but not including CPU imported separately and input or output device or accessories such as monitor, keyboard, mouse, modem, uninterrupted power supply or web camera imported separately".

7. On reading of the above provision makes it clear, that this provision covers a set of items brought together and capable of being put together to make a computer, whereas the item in dispute before the undersigned in appeal is a Note Book computer which is not a set of CPU, monitor, keyboard, mouse etc, but all these items and more (like modem, ups etc.) integrated into an inseparable unit. It is also common understanding that a set of items taken together to make a complete system should be capable of being taken out without affecting other items or the working of other items. The two case laws cited by the Appellants, and referred to in para 3 above, clearly bring out the fact in respect of the product in question i.e. Note Book Computer, to be an item which in common trade parlance is referred to as a 'Computer' complete and not as a set of CPU, keyboard, monitor and mouse. The individual items have last their identity and the item is only known as a complete product. The appellant have also furnished photocopy of their printed sales/marketing literature - copyright @ Acer India (Pvt.) Ltd., 2004 - which illustrates Note Books -: different models as 'Travel Mate 250 series; 370 series; C 111 series; 290E series; or the Ferrari 3000; Aspire 1350 series' etc . whereas their printed literature for the computer desktop model:- Acer Power S 100_series lists out in detail the specifications of the product, namely, processor, chipset, system memory, drives, net work interface (modem), OS options, 1/0 interface, 1/0 expansion, graphics, audio etc, besides referring to keyboard, mouse, monitor, housing power supply etc. - offering a dependable and cost effective configuration which a buyer may decide and order for, depending on his individual requirement and needs. Hence the two items are totally different though capable of performing same or similar functions, but one cannot be mistaken for the other. It, therefore, becomes clear that a Note Book computer is not a set of CPU, monitor, keyboard and mouse but a unit complete in itself and known and marketed as such. For this reason, a complete computer cannot be covered as a 'set of items' to be covered by the Computer (Additional Duty) Rules, 2004 and charged to duty.


8. In view of the foregoing, I pass the following order.
ORDER
I set aside the decision given in B/E No. 687308 dt. 24-9-2004 by the Assistant Commissioner of Customs, ACC, Bangalore, with regard to the levy of the Additional Duty of 7% charged therein. The Appeal filed by M/s. Acer India (Pvt.) Ltd., Bangalore, succeeds to this extent and they thereby become entitled to the consequential refund of the additional duty paid.


2. The Revenue is aggrieved with this order and seeks for restoration of the Assessment Order on the ground that Laptop computers are akin with the Desktop computers which are having independent sets. We have heard both sides in detail and find that there is no merit in the Revenue appeal. The item imported is a Laptop computer which has got all the ingredients in itself. The same is noi a Desktop computer. Therefore, the classification of the item Laptop computers has to be done under CH 8471 and, therefore, additional duty is not leviable on the same. The findings recorded by the Commissioner (Appeals) is exhaustive and detailed one and we do not find any error in the same. There is no merit in this appeal and the same is rejected.

(Pronounced and dictated in open Court)

Equivalent 2007 (208) ELT 0132 (Tri. - Bang.)

Equivalent 2007 (114) ECC 0357

Equivalent 2007 (140) ECR 0357 (Tri.- Bangalore)

Equivalent 2007 (079) RLT 0378 (CESTAT-Ban.)