1998(08)LCX0150

IN THE CEGAT, COURT NO. II, NEW DELHI

S/Shri P.C. Jain, Member (T) and S.S. Kang, Member (J)

COLLECTOR OF CUSTOMS, NEW DELHI

Versus

CYBER MEDICA INDIA LTD.

Final Order No. 687/98-B2, dated 31-8-1998 in Appeal No. C/723/94-B2

Advocated By : Shri R.S. Sangia, JDR, for the Appellant.

Shri Sanjay Grover, Advocate, for the Respondent.

[Order per : P.C. Jain, Member (T)]. - Question involved in the appeal of the Revenue is regarding classification of photocomposing machine described in the invoice as follows :

Dispute is whether it will be classified in Tariff Heading 84.2 (sic) as contended by the respondents herein or under Tariff Heading 84.71 as contended by the Revenue. The original authority classified the goods under Tariff Heading 84.71 taking it to be a computer i.e. automatic data processing machine, because it consists of keyboards, editing terminals etc. On the other hand, the lower appellate authority in appeal filed by the respondents has held that it is an essentially computers photocomposing machine performing all photocomposing material by laser printer. She relies on the decision of the Conference of Collector of Customs held at Cochin on 29th and 30th January, 1987 relating to desk top publishing system of computers, laser writer, software. The question before the authorities was whether it can be considered as photocomposing machine or not. Relying on the decision taken in the said Collector’s conference, the lower appellate authority has held that the present machine is also to be taken as photocomposing machine because it performs the specific function of photocomposing. The Commissioner (Appeals) also extended the benefit of Notification No. 217/90, dated 26-7-1990.

3. It is against the aforesaid finding of the lower appellate authority that the Revenue has filed this appeal. Their grounds are as follows : Reiterating the findings of the lower appellate authority the Revenue contends that the careful study of the minutes of conference would lead to the conclusion that the output device in that case was a laser writer operating on the electrostatic principle of photocopying. Therefore, the concept of involvement of photometrex principles was clearly therein in the output device viz. laser writer. On the other hand, in the subject consignment, the output device is a laser printer which has not been substantiated by the importers. It is further urged that to work on same principle as those involved in the laser writer therefore the subject import cannot be compared with those prevailing before the Collectors during their conference and the ratio of judgment therefore cannot be applied. This ground has been specifically reiterated by the ld. JDR Shri R.S. Sangia.

4. Opposing this ground, ld. Advocate Shri Sanjay Grover for the respondents has submitted that laser writer in the present case has been replaced by the laser printer output device. Therefore, there is no difference between the machines imported by the respondents herein and the machines considered by the Collector’s conference. Only difference being that the laser writer as being the output is replaced by the laser output printer. Therefore, he submits that the reliance placed by the ld. Commissioner (Appeals) on the decision of the Collector’s conference is correct and should not be disturbed. Apart from that he also draws our attention to Chapter Note 5 of Chapter 84. Relevant portion of which states as follows :

“Heading No. 84.71 does not cover machines incorporating or working in conjunction with an automatic data processing machine and performing a specific function. Such machines are classified in the headings appropriate to their respective functions or, failing that, in residual headings.”

5. He also draws attention to Chapter Note 4 of Section XVI which reads as under :

“4. Where a machine (including a combination of machines) consists of individual components (whether separate or interconnected by piping, by transmission devices, by electric cables or by other devices) intended to contribute together to a clearly defined function covered by one of the headings in Chapter 84 or Chapter 85, then the whole falls to be classified in the heading appropriate to that function.”

6. In view of this Chapter Note and Section Notes, ld. Advocate submits that since the machine performs specific function of photocomposing, the proper headings therefore, would be 84.42 and not 84.71.

6. We have carefully considered the pleas advanced from both the sides. We are inclined to agree with the pleas of ld. Advocate Shri Sanjay Grover for the respondents. It is observed that the complete machine including also performance of automatic data processing function is incidental merely to performing the specific function of photocomposing, and not any other function. It has not been brought out in the grounds of appeal of the Revenue that any other function is being performed by the machine under consideration. Therefore, we hold that the correct classification of the goods would be under Heading 84.42. In view of the aforesaid findings, the Revenue’s appeal is dismissed.

7. Next question involved in the present appeal is regarding the applicability of Notification No. 114/80-Cus. and Notification No. 217/90-Cus. Lower appellate authority has extended the benefit of later notification to the respondents herein inasmuch as they had produced the certificate from Registrar of Newspapers dated 5-10-1993.

8. It has been contended by the Revenue that the certificate of Registrar of Newspapers is only for the purpose of essentiality angle. Registrar of Newspaper is not competent to examine the technical angle of the goods in question. Therefore, he was not in a position and neither he is supposed to clarify and establish that the list of goods as produced before him were in fact constituting a photocomposing machine. The Registrar of Newspapers has only certified that the case of the importer was recommended from their side from the essentiality angle only and he has not commented upon about the nature of the goods. It is therefore urged that the said certificate cannot be accepted provided the goods contained therein are in fact photocomposing machine which can only be ascertained after examination of the goods and scrutiny of the documents by the Customs authorities.

9. We have heard both sides on this ground taken by the Revenue. We observe that this ground is dependent upon the question whether the machine imported is photocomposing machine or not. We have already observed in our finding above that the machine imported is photocomposing machines. It has been certified by the Registrar of Newspaper that it is meant for the newspaper and registered with the said Registrar. Therefore the benefit of Notification No. 217/90-Cus. has also been rightly extended by the lower appellate authority to the respondents herein. In view of the foregoings, the appeal of the Revenue is dismissed.

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Equivalent 1999 (108) ELT 583 (Tribunal)