2008(01)LCX0276

IN THE CESTAT, WEST ZONAL BENCH, MUMBAI [COURT NO. I]

Ms. Jyoti Balasundaram, Vice-President and Shri A.K. Srivastava, Member (T)

3S Industries

Versus

Commissioner of Customs (ACC), Mumbai

Final Order No. A/35/2008-WZB/C-IAC.S.T.B.), dated 14-1-2008 in Appeal No. C/146/2002

Cases Quoted -

Commissioner v. MX Software Services Ltd. - 2003(12)LCX0239 Eq 2004 (166) ELT 0387 (Tribunal) - Relied on [Para 4]

MX Software Services Ltd. v. Commissioner - 1999(12)LCX0025 Eq 2001 (131) ELT 0422 (Tribunal) - Relied on [Para 4]

Advocated By -

Shri Anil Balani, Advocate, for the Appellant.
Shri T. Govil, JCDR, for the Respondent.

[Order per: Jyoti Balasundaram, Vice-President]. -

The issue in the present appeal is the classification of 'Barcoae Printers (Thermal Label Printers)' -whether under Customs Tariff Heading 8471.60 as inputs or output units of automatic data processing machines - as claimed by the importers or under CTH 8443.59 as "printing machinery other than Inkjet Printing machines" as held by the Revenue.


2. We have heard both sides. The manual of the imported goods clearly brings out that the goods are printers connected to a computer. As per Note 5D to Chapter 84 of the Customs Tariff Act, printers, and key boards which satisfy the conditions of paragraphs 5B (b) and 5B(c) are in all cases to be classified as units of heading 84.71. Note 5B states that automatic date processing machines may be in the form of systems consisting of variable number of separate units. Subject to paragraph (E) below, a unit is to be regarded as being a part of a complete system if it meets all of the following conditions:

"(a) It is of a kind solely or principally used in an automatic data processing system;

(b). It is connectable to the central processing unit either directly or through one or more other units; and

(c). It is able to accept or deliver data in a form (codes or signals) which can be used by the system."


3. Since the goods in question are printers they are covered by Note 5D. Hence they are required to satisfy the conditions of paras 5B (b) and (c). There is no dispute that the conditions stipulated in Para 5B (b) is satisfied by the goods as the printers in question are connectible to the central processing unit. Note 5(B) (c) is also satisfied as the printers are able to accept or deliver data in a form which can be used by the system. Therefore, the goods are to be classified as units of Heading 84.71.


4. The authorities below have held that the goods are specifically .excluded from coverage under Customs Tariff heading 84.71 by applying Note 5(E) which provides that "machines performing a specific function other than data processing and incorporating or working in conjunction with an automatic data processing machine are to be classified in the headings appropriate to their respective functions or, failing that, in residual headings." However, since the goods are printers which satisfied the conditions of Note 5(B)(b) and (c) and since note 5D is not subject to the provisions of note 5(E) they cannot be held to be excluded from the coverage of heading 84.71. Our view is fortified by the decisions of the Tribunal in the case of MX Software Services Ltd. v. Commissioner -2001 (131) ELT 422 holding that note 5(D) is not subject to note 5(E) and the decision in the case of Commissioner of Customs, Madras v. MX Software Services Ltd. - 2004 (166) ELT 387 holding that as per Chapter Note 5(D) a printer in all cases is to be classified under heading 84.71 once it meets the conditions of note 5B(b) and (c).


5. In the light of the above discussions we hold that the goods in question fall for classification under CTH 84.71.60 set aside the impugned order and allow the appeal.

(Pronounced in Court)

Equivalent 2008 (226) ELT 0104 (Tri. - Mumbai)