2016(04)LCX0075

IN THE CESTAT, PRINCIPAL BENCH, NEW DELHI [COURT NO. IV]

Ms. Archana Wadhwa, Member (J) and Shri B. Ravichandran, Member (T)

COMMR. OF CUS. (IMPORT & GENERAL), NEW DELHI

Versus

INTEGRAL COMPUTER LTD.

Final Order No. C/A/51164/2016-CU(DB), dated 7-4-2016 in Appeal No. C/78/2012 and Cross Objection No. E/Cross/3043/2012

Cases Quoted -

Godrej Pacific Technology Ltd. v. Commissioner - 2004(03)LCX0426 Eq 2004 (169) ELT 0100 (Tribunal)- Referred [Paras 1, 2, 6]

Advocated By -

Shri Sanjay Jain, Authorized Representative (DR), for the Appellant.
Shri S.K. Pahwa, Advocate, for the Respondent.

[Order per : B. Ravichandran, Member (T)]. -

The main appeal in this case is filed by the Revenue against the order dated 24-11-2011 passed by Commissioner of Customs (Appeals), New Delhi. The brief facts of the case are that the respondent imported "interactive white board" and claimed Customs Tariff Heading (CTH) 8471 60 90. The classification was decided by the original authority under CTH 8472 90 90. The respondent filed appeal which resulted in the impugned order. The learned Commissioner (Appeals) set aside the original order but classified the product under CTH 8528 51 00. The present appeal by the Revenue is against this order. The main ground of the appeal is that the impugned goods will correctly fall under Heading 8472 as a type of machine used in offices, factories, schools, etc. Based on the Tribunal's decision in Godrej Pacific Technology Ltd. v. CC, Mumbai reported in 2004(03)LCX0426 Eq 2004 (169) ELT 0100 (Tri. - Mumbai), classification was sought under CTH 8472 90 90. It was contended by the Revenue that the interactive white board is not dependent on or controlled by computer and as such cannot be categorized as goods solely or principally used with Automatic Data Processing System of Heading 8471.


2. The respondent also filed cross-objection contesting the claim of the Department for the above-mentioned classification. It is the case of the respondent that the decision of the Tribunal in Godrej Pacific Technology Ltd. v. CC, Mumbai (supra), is not applicable to the present case as in that case the goods were found to be having duplicating capacity. It is submitted by the respondent that Department's appeal is without merit and the product may be classified under CTH 8471 60 10/90.

3. We have heard both the sides and examined the appeal records. The point of dispute is the correct classification of interactive electronic white board imported by the respondent. Three competing claims of classification are made in the present case; these are 8471 60 90 (as per respondent), 8472 90 90 (as per original authority) and 8528 51 00 (as per Commissioner (Appeals)). The prayer in the appeal by the Revenue is to restore the classification as ordered by the original authority. The prayer in the cross-objection filed by the respondent is to dismiss the Department's appeal and also allow their claim for classification. We have to examine the nature of the product in the present case. We have perused the User Guide for the said Electronic White Board and also various technical literature submitted by the respondent. The product is described as a PC based Input Equipment which when connected with projector and PC can be used for functions such as writing, noting, drawing, geometric graphics, editing, printing and storing. Some of the key features of the white board are that it creates an interactive environment for teaching and demonstration, if connected with PC and projector under the support of dedicated software. The electronic pen supplied with the white board can operate the PC instead of mouse. The said electronic pen can write, erase, copy, replay and save files.

4. First we consider the correctness of classification by the original authority which is now sought to be restored by the Revenue in their appeal, under Heading 8472 90 90. We find Heading 8472 90 90 reads as below :-

5. Even a preliminary perusal will reveal the scope of the above-mentioned entry. All these equipments which are falling under 8472 are generally of such nature which are mainly used in a day-to-day office function. The impugned goods which are interactive teaching device which is mainly used for classroom teaching or in the conferences and meetings and work only when connected to a computer and projector cannot fall under the general/broad category of "other office machine". The nature of machines falling in the main heading have no class resemblance to the impugned goods.

6. Further, we note that the Tribunal's decision in Godrej Pacific Technology Ltd. v. CC, Mumbai (supra), will not assist in deciding the present case. The Tribunal never examined the competing claims with technical literature to record a categorical view on classification. The Tribunal simply observed that as per the practice then existing the goods were classified under Chapter Heading 8472 90 which required import licence and hence as the appellant did not have such licence the goods were liable to confiscation. From the order it is seen that the equipments in that case had inbuilt copying system. We find that the Tribunal's order in the said case will not assist in finding the correct classification in the present dispute. In view of the above position and also for the reasons recorded hereafter,

7. we find the classification of the impugned goods under 8472 90 90 is not sustainable.


8. This leaves us with the competing claim between CTH 8471 and 8528. The respondent's claim is for CTH 8471. The main heading is :
Automatic data processing machines and units thereof; magnetic or optical readers, machines for transcribing data on to data media in coded form and machines for processing such data, not elsewhere specified or included. Sub-heading 8471 60 deals with input or output units whether or not containing storage units in the same housing.Various input/output units like printer, platter, keyboard, scanners, mouse are all categorized under the subheading. The respondent's claim is under CTH 8471 60 90 as "other such device".
We find that Note 5 of Chapter 84 has to be examined and applied to decide the claim. Note 5(D) states that Heading 8471 does not cover the monitors and projectors not incorporating television reception apparatus when presented separately, even if they meet all the conditions set forth in Para (C) of the said Note. Further, para (E) states that machines incorporating or working in conjunction with an automatic data processing machine and performing a specific function other than data processing are to be classified in the heading appropriate to their respective functions or failing that in residual headings. Application of the above-mentioned Chapter Note may be appreciated along with the fact that the mounted electronic white board is primarily a display device though by using the electronic pen commands can be sent to the computer for a specific action. As such, it is such pen which more appropriately can be put under an input device like mouse, key board, etc. Whereas in the present case the electronic white board which gets the display function by combined action with a computer and a projector cannot be considered as a simple input or output device. It is more appropriate to identify it with its primary function of display. This is clear by applying the Note 5 of the Chapter Note, as discussed above. Further, 8528 deals with monitors and projectors, not incorporating television reception apparatus. The sub-heading 8528 51 00 deals with other monitors of a kind solely or principally used in an automatic data processing system of Heading 8471.


9. We find the learned Commissioner (Appeals) examined specifically the correct classification of the product with reference to its actual function and applicable chapter notes. The impugned order also recorded the impugned goods cannot work without a projector even if it is attached to a computer. The learned Commissioner (Appeals) on seeing the demonstration of the equipment and after examination of the applicable chapter notes came to the conclusion that they are correctly classifiable under CTH 8528 51 00.

10. We find, based on the above analysis and discussion, there is no merit in the appeal by the Revenue and accordingly the same is dismissed. For the reasons stated above, the CO filed by the respondent is also disposed of.
(Order pronounced in open Court on 7-4-2016)

Equivalent 2016 (337) ELT 0580 (Tri. - Del.)