2000(06)LCX0234

IN THE CEGAT, COURT NO. II, NEW DELHI

S/Shri V.K. Agarwal, Member (T) and P.G. Chacko, Member (J)

CASIO INDIA CO. LTD.

Versus

COMMISSIONER OF CUSTOMS, MUMBAI

Final Order No. 1013/2000-B, dated 7-6-2000 in Appeal No. C/371/99-B

Cases Quoted

Cine Land v. Commissioner — 1999(06)LCX0154 Eq 1999 (114) ELT 0653 (Tribunal) — Relied on .............. [Paras 4, 7]

M.J. Exporters v. CEGAT — 1992(05)LCX0008 Eq 1992 (060) ELT 0161 (S.C.) — Relied on ................................. [Para 7]

Richardson Hindustan Ltd. v. U.O.I. — 1988(06)LCX0049 Eq 1988 (037) ELT 0496 (Bom.) — Relied on.............. [Para 7]

Advocated By :   Shri G. Shiv Das, Advocate, for the Appellant.

Shri M.P. Singh, JDR, for the Respondent.

[Order per : V.K. Agarwal, Member (T)]. - The issue involved in this appeal, filed by M/s. Casio India Co. Ltd., is whether the ‘Electronic diaries’, imported by them, are importable against a freely transferable special import licence, being classifiable under Sub-heading 8471.10 or the First Schedule to the Customs Tariff Act or can be imported against a specific import licence, being consumer goods and classifiable under Sub-heading 8470.10 of the Customs Tariff Act (CTA).

2. Briefly stated the facts are that the Appellants imported Casio DC 2000 and Casio JD 4000 Data Bank (Digital diaries), classified them under Sub-heading 8471.10 of CTA and claimed clearance under special import licence (SIL). The Deputy Commissioner of Customs, under Adjudication Order No. 415/96 dated 26-12-1996, classified them under Sub-heading 8470.10 of CTA, confiscated the impugned goods with an option to the Appellants to redeem the same on payment of fine of Rs. 4 lakhs and imposed a penalty of Rs. 1 lakh, holding that digital diaries do not satisfy the criterion of being ‘automatic data processing machines’ which fall under Heading 84.71; that these are only an advanced version of a calculator with a few more simple day to day use; that digital diaries would be categorised as consumer goods as defined in EXIM Policy for import of which specific import licence is required. On appeal, the Commissioner (Appeals), under the impugned Order No. 64/99 dated 3-5-1999, rejected the appeal, holding that the impugned goods cannot be used for writing a programme as per the user’s requirement and these are limited to only the programmes stored already therein; that as far as the classification of the goods is concerned, Department has to arrive at in accordance with the Customs Tariff Act.

3. Shri G. Shiv Das, ld. Advocate, submitted that as per the ITC (HS) Classification of Export & Import Items issued by the Ministry of Commerce, Electronic diaries are classified under the harmonised EXIM code 8471 permitting the importation against Special Import Licence (SIL); that the Appellants sought clarification from the Director General of Foreign Trade (DGFT) under their letter dated 23-10-1996; that the DGFT, under letter dated 31-10-1996, clarified that electronic diaries under EXIM Code No. 84711000.10 in the ITC (HS) Classification of Export & Import Items are allowed to be imported against freely transferable SIL; that the same clarification was given by DGFT under letter, dated 5-11-1996 and 19-11-1996 to Export Promotion Council and M/s. Casio Bharti Mobile Communication Ltd., respectively; that once the impugned goods are categorised as digital diaries, then for the purpose of import, the classification given by the DGFT is final and binding. In support of his contention, the learned Advocate referred to the Preface to the EXIM Policy (1-4-1992 to 31-3-1997) wherein it was mentioned as under :

“With the publication of the “Export & Import Policy aligned on ITC (HS) Classification,” in October, 1995 the areas of ambiguity and dispute of the importability and exportability of items included in the negative List of Imports and Negative List of Exports were significantly reduced. This document has been reviewed in detail and the revised document is now being officially notified under the provision of paragraph 8 of this Policy, under the title “ITC (HS) Classification of Export & Import Items” providing greater transparency on the export and import licencing Policy and compatibility with the system of Commodity classification, adopted by Customs Central Excise and the Directorate General of Commercial Intelligence and Statistics.”

4.  He also referred to Para 20 of the Export & Import Policy which provides that if any doubt arises in respect of the interpretation of any provision contained in this Policy, the question or doubt shall be referred to the DGFT “whose decision thereon shall be final and binding.” He, further, submitted that the intention of the Government was to permit the import of Electronic Diaries against freely transferable SIL is clear from the fact that even in the earlier ITC (HS) Classification, the position of freely importable was there; that in the present ITC (HS) Classification the import of the Electronic Diaries is made free; that in the earlier Policy of 1996, in relation to items covered under APR-35, Electronic Diaries by description were importable under freely transferable SIL. In this regard, he referred to Public Notice No. 338 (PN) 92-97 dated 2-1-1996 issued by the DGFT. Finally, the learned Advocate mentioned that the DGFT is the final authority for deciding whether the importer under a SIL is restricted or otherwise as held by the Tribunal in the case of Cine Land v. CCE, 1999 (114) ELT 653.

5. Opposing the arguments, Shri M.P. Singh, ld. DR, submitted that Heading 84.71 does not cover the type of electronic diaries imported in the present matter; that Heading 84.71 covers the electronic diaries which would fall under the category of ‘automatic’ data processing machines and units thereof; that the correct classification of electronic diaries is under Heading 84.70 of the Customs Tariff Act and also under HSN because this Heading applies to ‘Calculating machines and pocket size data recording, reproducing and displaying machines with calculating functions; that the said classification will be binding in respect of import licence also; that the description of both Headings 84.70 and 84.17 under Customs Tariff Act & HSN is same in Customs Tariff and ITC (HS) Classification. The learned DR further submitted that DGFT under letters dated 31-10-1996, 5-11-1996 and 19-11-1996, relied upon by the Appellants, has given clarification that electronic diaries falling under EXIM Code No. 84711000 is only a sub-heading of main Heading 84.71; that unless and until the item falls under Heading 84.71, the import of the same is not permitted without a specific import licence.

6. In reply, the learned Advocate for the Appellants mentioned that in their letter dated 22-10-1996, seeking the clarification from DGFT about the clearance of Electronic diaries under ITC classification 84711000 against special Import licence, they had mentioned the Model of the Electronic Diary also and as such it cannot be said that the clarification issued by DGFT was not in respect of the impugned goods.

7. We have considered the submissions of both the sides. The undisputed fact is that the Appellants had imported Electronic Diaries Model DC 2000 and Model J.D. 4000. The Appellants, under their letter dated 22-10-1996, had sought clarification from DGFT about these imported goods as the Bombay Customs was reluctant to release the consignment against special import licence. The DGFT vide their letter dated 31-10-1996, in reply to Appellants letter dated 22-10-1996, clarified that electronic diaries under EXIM Code No. 84711000 are allowed to be imported against feely transferable Special Import Licence. The ld. Advocate has also referred to Para 20 of Chapter IV of the Export & Import Policy (1992-1997) in which it is clearly mentioned that if any question or doubt arises in respect of the interpretation of any provisions contained in the Policy, the decision of the DGFT shall be final and binding. The Appellate Tribunal in the case of Cine Land v. CCE, Chennai, supra, has held that “it is now a well settled law that clarification on import policy issued by office of DGFT is binding on Customs as far as ITC Policy is concerned in view of the decisions cited by the ld. Senior Advocate.”(M.J. Exporters v. CEGAT, 1992(05)LCX0008 Eq 1992 (060) ELT 0161 (S.C.) and Richardson Hindustan Ltd. v. U.O.I., 1988(06)LCX0049 Eq 1988 (037) ELT 0496 (Bom.). We also observe that it is mentioned in Heading 84.71 of the ITC (HS) Classifications of Export & Import Items as under :

8. The imported goods have been ordered to be confiscated as the same were imported without a specific import licence, goods being consumer goods as they were not classifiable under 84711000 of the ITC (HS) Classification. There is nothing brought on record by the Revenue to show that the Electronic diaries mentioned in ITC (HS) Classification are different from the electronic diaries imported in the present matter. If there was any doubt, the Customs authorities should have sought the clarification from the DGFT instead of disregarding the classification issued by it. In view of the specific mention of Electronic diaries in Sub-heading 84711000 of the ITC (HS) Classification coupled with the clarification given by the DGFT, which is binding on Customs Authorities, we set aside the impugned Order and allow the Appeal filed by the Appellants.

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Equivalent 2000 (121) ELT 379 (Tribunal)