1998(04)LCX0215

  IN THE CEGAT, EASTERN BENCH, CALCUTTA

Shri P.C. Jain, Member (T) and Mrs. Archana Wadhwa, Member (J)

APEEJAY LTD.

Versus

COMMISSIONER OF CUSTOMS, CALCUTTA

Order No. A-362/CAL/98, dated 16-4-1998 in Appeal No. C/1773/90-B

CASE CITED

Indu Agencies v. Commissioner — 1997(08)LCX0178 Eq 1998 (104) ELT 0736 (Tribunal) — Referred                 [Para 5]

Advocated By : Shri G.K. Singh, Advocate, for the Appellant.

Shri T. Premkumar, SDR, for the Respondents.

[Order per : Archana Wadhwa, Member (J)]. - The dispute in the instant case relates to the item namely Video Display Keyboards imported by the appellant firm along with Photo-composing Machine. Whereas the Department is claiming the classification of the said Keyboards as Computer Peripherals under Sub-Heading 8471.99 of the Customs Tariff Act, 1975 read with Notification bearing No. 58/88-Cus, the appellant firm is classifying the said product under Heading 8442.10 of the Act and claiming exemption in terms of the Notification Nos. 49/79-Cus. and 89/88-Cus.

2. The appellants had imported, in the year, 1982, three Video Display Keyboards and one Photo-composing Machine Set 3560-W and three Comp/Set 3560-45 Photo-composing Machines. In respect of these items, the appellants made a declaration to the Customs Authorities that the goods comprised thereby would be used by them in their own printing press. The classification of the entire consignment including the Keyboard was claimed under Heading 84.35, which at the material point of time reads as under :-

“Other printing machinery; machinery for uses ancillary to printing.”

3. The appellants claimed that the above classification was accepted by the Department. However, the benefit of exemption Notification was sought to be denied to them. Thereafter, on the appellants’ request, the goods were allowed to be warehoused in its duly licensed private bonded warehouse. In the year, 1984, a bill of entry for ex-bond clearance of two photo-composing machines as well as two keyboards, was filed by the appellants and the same were cleared by classifying the same under Heading 84.35. Subsequently, on December 10, 1986, the appellant firm made a representation to the Commissioner of Customs stating therein that the remaining Keyboards lying in the Bonded Warehouse, should also be assessed under Heading 84.35 in terms of the amending Notification No. 114/80-Cus. The Department entertaining a different view, required the appellant firm to clear the Keyboards by paying the higher rate of duty.

4. Appearing on behalf of the appellant firm, Shri G.K. Singh, learned Advocate, argued the matter and submitted that the Keyboards in question cannot function independently and the same was synchronized to function under harmony and unison with the Photo-composing Machine which was imposed by the appellants. He submitted that the said Keyboard is an integral part of the Photo-composing Machine and is used in conjunction with the same. Keyboard does not have any independent function. They are used for Input and Editing of copies of different languages and styles after taking the characteristic width of language types from the said Photo-composing Machine. He submitted that the said Keyboard records copy on discs for subsequent output on the Photo-composing Machine and cannot record the copy on the discs without taking the characteristic width from the Photo-composing Machine. He further submitted that the said Key Board cannot perform exposing work. To expose the copy recorded on the disc, the same are required to be inserted in the Photo-composing Machine (P.C.M. in short). In this connection, he referred to the copies of the literatures of the foreign suppliers. Reference is also drawn to the two Certificates from M/s. Ganshakti Newspaper Publishers and M/s. Kohli Graphic Systems, New Delhi, which are to the effect, that the Keyboard is an integral part of the main Com/Set Photo-composing Machine and has no independent use.

5. Countering the arguments, Shri T. Premkumar, learned SDR drew attention of the Bench to the impugned Order-in-Appeal of the Commissioner (Appeals) and reiterated the reasoning adopted by the first appellate authority. He submitted that the relevant catalogue/leaflet clearly indicated that the Item under dispute was an Off-Line Equipment. The term, `Off-Line’, is used in Computer Phraseology to denote a peripheral equipment or device not in direct communication with the Central Processing Unit of a computer. Learned Commissioner has observed, inter alia, that the pertinent point for considering its classification under Tariff Heading 84.71 is that as per leaflet it is merely a `companion’ to the P.C.M. for facility of the storage of the data for subsequent use in the P.C.M. As such, it has an auxiliary function and does not constitute any functional unit together with the P.C.M. In this connection, Shri Premkumar also made a reference to the Tribunal’s decision in the case of M/s. Indu Agencies v. Commissioner of Customs, in Order No. A-952/CAL/97, dated 5-8-1997 [1997(08)LCX0178 Eq 1998 (104) ELT 0736 (Tribunal)], wherein the appellants had claimed for classifying a part of Monitor Assembly of the Phototype-Setting Machine under Heading 8442.30 and that was rejected by the Tribunal and the same was held to be a part of the Computerised Machine or Automatic Data Processing Machine classifying under sub-heading 8473.30. He, accordingly, prayed for rejection of the instant appeal.

6. We have carefully considered the submissions of both sides. The Department’s claim is that the Video Keyboards are classifiable under Heading 84.71 as Computer Peripherals. The said Heading reads as under :-

“Automatic data processing machines and units thereof; mechanical or optical readers, machines for prescribing data on to data media in coded form and machines for processing such data not elsewhere specified or included.”

7. The Video Display Keyboard, as is evident from the literature of the foreign supplier, record the copy on discs for subsequent output on the Comp/Set Photo-composing Machine. They cannot be called Automatic Data Processing Machines. They are meant for recording the texts and commands on magnetic discs for onward transfer to the P.C.M. Primarily the same are meant for storing the displaying and editing of the copy to be set on Comp/Set Photo-composing Machine. The Video Display/Keyboard controls the functions of all Comp/Set Models. Though the Keyboard in question is a Stand-alone Off-line Terminal for input, the same is identical to the On-line Keyboard Unit of Comp/Set P.C.M., as claimed by the manufacturers in the literature produced by the appellants, on record. We do not agree with the Department that the said Video Display Keyboard would fall under any of the Items enumerated under Heading 84.71. Accordingly, we set aside the impugned Order and allow the appeal filed by the appellants with consequential reliefs to them, if any.

8. [Assent per: P.C. Jain, Member (T)]. - I propose to write the following order.

9. It is true that the Video Display Keyboard in question, is a stand-alone off-line terminal for input recording on a disc. But it is not denied that the keyboard was synchronised to function with the photo-composing machine. An equal number of said keyboards had been imported with three photo-composing machines 3560, and two of the said keyboards have already been released accepting the claim of the appellant u/h 84-35, as is evident from Para 6 of the Statement of Facts in appeal memo to the Tribunal reproduced below :-

6. In 1984 the appellant cleared two photo-composing machines and two of the said keyboards for home consumption. In the bill of entry for ex-bond clearance for home consumption the Customs Authorities classified the said photo-composing machines as well as the said keyboards under Heading No. 84.35. Further, importation of the said goods including the said keyboard under the open General Licence was also allowed by the Customs Authorities. The customs authorities, however, wrongfully and illegally did not grant the exemption under the Notification Bearing No. 114/80-Cus. in respect of the said keyboards. Copy of the said bill of entry in annexed hereto and marked `E’.

There is no reason why his claim for the remaining keyboard, now before us be not accepted. The same benefit be extended to the keyboard as extended to two keyboards released earlier in so far as question of classification is concerned. Rate of duty would however be dependent upon the date of removal from the warehouse.

10. In view of the factual position, I allow the appeal in above terms with consequential relief to the appellant, after setting aside the impugned Order.

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Equivalent 1999 (108) ELT 735 (Tribunal)

Equivalent 1998 (026) RLT 0371