2005(03)LCX0118
IN THE CESTAT, SOUTH ZONAL BENCH, CHENNAI
S/Shri P.G. Chacko, Member (J) and T.K. Jayaraman, Member (T)
LIPI MARKETING
Versus
COMMISSIONER OF CUSTOMS, (SEA), CHENNAI
Final Order Nos. 321 & 322/2005, dated 7-3-2005 in Appeal Nos. C/322 & 323/2004/MA
Cases Quoted
Commissioner v. MX Software Services Ltd. — 2003(12)LCX0239 Eq 2004 (166) ELT 0387 (Tribunal) — Referred [Para 2]
Emgee Cables & Communication Ltd. v. Commissioner — 2002(03)LCX0090 Eq 2002 (144) ELT 0666 (Tribunal) — Referred [Para 2]
MX Software Services Ltd. v. Commissioner — 1999(12)LCX0025 Eq 2001 (131) ELT 0422 (Tribunal) — Referred [Para 2]
Advocated By : Shri D.M. Rangam, Advocate, for the Appellant.
Smt. R. Bhagyadevi, SDR, for the Respondent.
[Order per : T.K. Jayaraman, Member (T) (Oral)]. - The point at dispute is correct classification of the Ink-jet printer imported by the appellants. Commissioner (Appeals) in the impugned orders has classified the goods under Chapter Heading 84.43. However, the appellants contends that the items are rightly classifiable under Heading 84.71.
2. Shri GDM Rangam, learned Counsel for the appellants appeared for the appellants and Smt R. Bhagyadevi, learned SDR for the Department. The learned Counsel urged the following grounds :
“According to Note 5(D) appearing in Chapter 84, printers key board, x-ray coordinate input device and disk storage units which satisfy the conditions in terms of Note 5(B)(b) and (c) are in all eases to be classified as a unit of data processing systems. The condition mentioned in (b) is that the machine is connectable to the central processing unit either directly or through one or more other units and the condition (c) is that it is able to accept or deliver data in a coded form or signals, which can be used in the system. It is needless to say that in the case of inject printers attached to the computers two conditions mentioned in (b) and (c) are fully satisfied. Therefore, in terms of the chapter notes which has got a legal basis the impugned machine is rightly classifiable under 84.71.”
The learned Counsel also relied upon the following case laws :
(a) Emgee Cables & Communication Ltd. v. CC reported in 2002(03)LCX0090 Eq 2002 (144) ELT 0666 (Tri. - Mumbai)
(b) MX Software Services Ltd. v. CC, Mumbai reported in [1999(12)LCX0025 Eq 2001 (131) ELT 0422 (Tri.) = 2000 (038) RLT 0150 (CEGAT)]
(c) CC, Madras-1 v. MX Software Services Ltd. reported in [2003(12)LCX0239 Eq 2004 (166) ELT 0387 (Tri.) = 2004 (061) RLT 0277 (CESTAT-Del.)].
3. The learned SDR made the following submission. Relying on Chapter Note 5(E) of Chapter 84, the learned SDR submitted that Machines performing a specific function other than data processing and incorporating or working in conjunction with an automatic data processing machine are to be classified in the headings appropriate to their respective functions or, failing that, in residual headings. The learned SDR made the point that Note 5(D) refers to paras 5(B) (b) and 5(B)(c). Para 5(B) is subject to para 5(E). Therefore, para (E) is also important. In this connection, she referred to the following extracts from the HSN explanatory notes on Digital machines classifying the scope of Note 5(D) of Chapter 84.
“thus ink-jet printers working in conjunction with an automatic data processing machine but having, particularly in terms of their size, technical capabilities and particular applications, the characteristics of a printing machine designed to perform a specific function in the printing or graphics industry (production of pre-press colour proofs, for example) are to be regarded as machines having a specific function classifiable in heading 84.43”
A reading of para 5(E) in conjunction with HSN explanatory notes would reveal that ink-jet printers having particularly characteristics of a printing machine are to be regarded as machines having specific function classifiable under Heading 84.83, argued the learned SDR. She further extracted following information from the Website of the importers to strengthen the Revenue’s case that the printers imported by the appellants are mainly used in printing industry.
“Lipi products include Ditigal printing machines, Plotters, laser engraving machines, 3D CNC Routing machines, seaming machines, hot wire thermocol cutting machines, flex, vinyl, ink and all other raw materials used in the signage industry. Lipi had taken its first step into the industry, as an Engraving company, in 1979 in India at Chennai and Lipi products are Signage solutions, large format printing solutions, large format printing machines, cutting plotters in India. Lipi products are ink-jet plotter, cutting plotter in India, laser engraver, 3D CNC router, hot wire cutting machines, hot air welding, seaming machines, hot wire thermocol cutting machines and all other raw materials used in the signage industry. Lipi committed and well trained workforce gives it to the edge in the industry, our products are signage solutions, cutting plotters, router tables, laser engraving machines. DGI distributor in India”.
She also referred to the catalogue indicating the features of the machines imported by the appellants. Specification reveal that weight of the machine is 118 kg, Stand alone weighs 116.4 kgs, Media of printing is roll and Sheet, maximum printing width is 66 inches, the print speed is indicated as 280 sq ft/hr. All these specifications point to the fact that the machine is used in Industry and not with any general purpose computer.
5. Countering the arguments, of the learned SDR, the learned Counsel for the appellants urged that the items imported strictly satisfy Note 5(D) of 84 and should be classified under Heading 84.71. He further stated that the Tariff has not prescribed any parameters to classify the goods under Chapter Heading 84.43.
6. We have gone through the rival contentions. The learned Counsel apart from citing the case laws, emphasized Note 5(D) of Chapter 84 to buttress his point that ink-jet printers imported by the appellants satisfy Note 5(D) and hence they are rightly classifiable under Heading 84.71. However, as urged by the learned SDR one cannot go simply by reading of Note 5(D) in isolation. Note 5(D) refers to Note 5(B) which in turn is subject to Note 5(E) according to which when the machine performs specific function of data processing, it should be classified under the heading appropriate to its respective functioning, even though the machine is used in conjunction with automatic data processing machine. In the present case, no doubt, the imported ink-jet printer satisfies Condition 5(D). In that sense, one can classify it under Heading 84.71. But Note 5(E) also cannot be ignored. Note (E) has been amplified in the HSN explanatory notes and it specifically states that ink-jet printers working in conjunction with an automatic data processing machine, but having particularly in terms of their size, technical capabilities, the characteristics of a printing machine designed to perform a specific function in the printing or graphics industry (production of pre-press colour proofs, for e.g.) are to be regarded as machine having a specific function are classifiable under Heading 84.43. In our view, on going through the explanatory note we come to an understanding that ink-jet printers, which are normally used in conjunction with computer in office or home, would rightly be classifiable under Heading 84.71. However looking into the specifications of the machines imported by the appellants, we find that they are used in Industry in the sense that these machines print in rolls and sheets. They are not normal papers. They are actually PVC or plastic media and are used mainly in Signage Industry. Hence, we are of the considered view that the impugned goods are rightly classifiable under Heading 84.43. Chapter Heading 84.43 reads as follows :
“Printing machinery used for printing by means of the printing type, blocks, plates, cylinders and other printing components of heading 8442; Ink-jet printing machines, other than those of heading 8471 machines for uses ancillary to printing”
Even this heading includes ink-jet printing machine other than those of Heading 84.71. That means ink-jet printers are capable of two classifications, one classification under Heading 84.71 and the other is 84.43. A reading of Heading 84.43 reveals that machines included therein are mainly used in printing/ graphics industry. After going through the specifications of the imported ink-jet printers, 84.43 and not under Heading 84.71. Hence the appeals are rejected.
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Equivalent 2005 (184) ELT 0316 (Tri. - Chennai)