2002(07)LCX0166

IN THE CEGAT, COURT NO. II, NEW DELHI

S/Shri S.S. Kang, Member (J) and V.K. Agrawal, Member (T)

COMMISSIONER OF CUSTOMS, NEW DELHI

Versus

CINE SALES CORPORATION

Final Order No. 305/2002-B, dated 12-7-2002 in Appeal No.C/184/2002-B

Advocated By : Smt. Nita Lal Butalia, SDR, for the Appellant.

Shri K.K. Anand, Advocate, for the Respondent.

[Order per : S.S. Kang, Member (J)]. - Revenue filed this appeal against the order-in-appeal passed by the Commissioner of Customs (Appeals).

2. Brief facts of the case are that respondents made an import of 8 Channel Stereo Processor and claimed the classification under Heading 8543.89 of the Customs Tariff. The adjudicating authority held that the goods in question are classifiable under Heading 8519.99 of the Customs Tariff and is a restricted item under the EXIM Policy and it requires a specific import licence. The adjudicating authority confiscated the goods and allowed the release of the goods on payment of redemption fine of Rs. 70,000/- and penalty of Rs. 20,000/- was also imposed. On appeal, the Commissioner (Appeals) allowed the appeal on the ground that the goods are not classifiable under Heading 8519.99 of the Customs Tariff.

3. Heard both sides.

4. The contention of the Revenue is that 8 Channel Stereo Processor imported by the respondents was fully compatible with digital formats and was designed to process 70mm & 35mm magnetic sound tracks. This stereo processor is a dual system in that the digital audio data is recorded on CD Rom Disks. A special DTS time code is printed on the motion picture print along with a conventional stereo optical sound track. The time code is used by the DTS system to synchronise the sound and picture. The processor consists of a reader head and the processor which work in conjunction comprising a system of sound reproduction. Hence 8 channel stereo processor is covered specifically under CTH 8519.99.

5. The contention of the Revenue is also that this equipment is stereo sound reproducer and is heart of the theatre sound systems. All sound sources are converted to processor which processes the signals appropriately and feeds them to the power Amplifier. 8 Channel Stereo Processor also functions as sound reproducing device and more appropriately classifiable under CTH 8519.99.

6. The contention of the respondents is that there is no evidence to show that the goods in question are capable of sound reproduction. He relies upon the findings of the Commissioner (Appeals) where it is held that equipment does not have any sound head mechanism.

7. The Revenue wants to classify the goods under Chapter Heading8519.99 of Customs Tariff which covers Turntables (record-decks), record-players, cassette-players and other sound reproducing apparatus, not incorporating a sound recording device.

8. In the present case the Commissioner (Appeals) held that as per catalogue of the goods, the goods in question gets inputs, that is, sound from a 2 channel stereo CD or tape. The equipment does not have sound head mechanism or a mechanism to use sound records made by the records. This finding of fact was not controverted by the Revenue in the present appeal. Further, we find that the adjudicating authority also held that the goods in question does not have sound reproducer. As the Heading8519 covers the sound reproducing apparatus, therefore, the goods in question are not classifiable under Heading 8519 of Customs Tariff. The appeal is dismissed.

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Equivalent 2002 (145) ELT 582 (Tri. - Del.)

Equivalent 2002 (052) RLT 0906