2004(05)LCX0132
IN THE CESTAT, WEST ZONAL BENCH, MUMBAI
S/Shri S.S. Sekhon, Member (T) and T. Anjaneyulu, Member (J)
INDIAN AIRLINES LTD.
Versus
COMMISSIONER OF CUSTOMS, ACC, SAHAR
Order No. A/203/2004-WZB/C-II, dated 14-5-2004 in Appeal No. C/95/97-Mum.
Cases Quoted
Air Freight Pvt. Ltd. v. Collector — 1984(03)LCX0001 Eq 1987 (031) ELT 0112 (Tribunal) — Followed............... [Para 1]
Collector v. Malleable Iron & Steel Castings Co. (P) Ltd. — 1997(12)LCX0064 Eq 1998 (100) ELT 0008 (S.C.) — Distinguished [Para 1]
Collector v. O.E.N. India Ltd. — 1987(10)LCX0061 Eq 1989 (042) ELT 0235 (Tribunal) — Distinguished......... [Para 1]
Indian Airlines v. Collector — 1998(03)LCX0145 Eq 1998 (103) ELT 0227 (Tribunal) — Followed...................... [Para 1]
Steel Weld (India) v. Commissioner — 2002(10)LCX0092 Eq 2003 (153) ELT 0345 (Tribunal) — Distinguished [Para 1]
Advocated By : Shri M.J. Nambiar, Consultant, for the Appellant.
Shri R.P. Pardeshi, JDR, for the Respondent.
[Order per : S.S. Sekhon, Member (T)]. - Heard both sides. Considered the materials and it is found -
(a) Issue is classification of goods imported by Indian Airlines especially Item No. II on BE No. 004748, dated 14-8-90 consisting of 3 pieces declared is Disc for Computer and its eligibility to Notification No. 298/76, dated 2-8-76.
(b) The entity in question is a Disc Pack for the specialized computer portion of the pilot simulator and were required for Operational reasons of Indian Airlines, duty was paid and subsequently refund claim was lodged on basis of the re-assessment under notification 298/76, dated 2-8-76. The reassessment and refund was rejected.
(c) The Commissioner (Appeals) found -
“………..Computer discs are parts of computers and not of simulators. Even though this may be used for the purpose of simulator, but computer parts remains as computer parts to be assessed under CTH 8473. In fact the item was assessed in the BE under 8473 as claimed in BE and the assessment finalised. No other technical stand is possible now.”
and he confirmed the orders of the lower authority. Hence this appeal.
(d) ‘Hard Disc Packs’ recorded media, while in the entity under consideration would be classified under Heading 83.23.20 and not under 8473 as arrived at by the ld. Commissioner.
However chapter Note No. 6 to Chapter 85 of Customs Tariff Act Schedule reads as under -
“Records tapes and other media of heading 8523 or 8524 remain classified in these headings, when they are presented with the apparatus for which they are intended.”
This note does not apply to such media when they are presented with articles other than the apparatus for which they are included.
Reading of this note and on considering that the Disc Pack is intended for use in a “Pilot simulator” and when presented with pilot simulator, they would have got classified as such under Heading 88.05. Reading the section notes for parts under Section XVII Note 3 where Chapter 88 is covered and which reads as -
“3. Reference in Chapters 86 to 88 to “parts” or “accessories” do not apply to “parts or accessories” which are not suitable for use solely or principally with the Articles of these chapters. A “part or accessory” which supports to a description in two or more of the headings of these chapters is to be classified under the heading which corresponds to the principal use of that part or accessory.”
Therefore after reading the above, looking at the use of the entity and the HSN Notes under Heading 8805. The import of parts solely designed for use of Ground flying transit would fall under Heading 8805.20 of the HSN which include flight simulators functioning electronically by electronic apparatus which feed the centres etc., simulating the flying conditions. Classification of the entity would be therefore under 88.05 of the Customs Tariff Act. Reliance is also placed on 1998 (103) ELT 227 in appellant’s own case for parts of a simulator.
(e) Once classification is arrived at under 88.05, and on finding that notification 298/76 exempted, “Component parts of simulators of aeroplanes and other aircrafts falling within Chapter 88...,”there is no reason to deny the benefit of the notification.
(f) Following the CEGAT decisions, 1984(03)LCX0001 Eq 1987 (031) ELT 0112(T) for classification even if parts fall for classification elsewhere under the Customs Tariff, the exemption would be eligible, since wording of Notification 298/76 and Notification 35/79 are para materia.
(g) The case law relied upon by the ld. DR viz. 1997(12)LCX0064 Eq 1998 (100) ELT 0008 (S.C.), 2003 (152) ELT 0991 (sic), 1989 (042) ELT 235 & 2002(10)LCX0092 Eq 2003 (153) ELT 0345 (T) = 2003 (054) RLT 458 will not help the case of the Revenue to sustain the orders of classification under 84.73 and to deny the exemption in view of the classification arrived at under 8805.
2. In view of the findings, the appeal is to be allowed, after setting aside the order.
3. Ordered accordingly.
Equivalent 2004 (170) ELT 0302 (Tri. - Mumbai)