Customs, Excise and Gold Tribunal - Delhi
Efy Enterprises (P) Ltd. vs Collector Of Customs on 9 September, 1992
Equivalent citations: 1993(45)ECR174(TRI.-DELHI)
ORDER Jyoti Balasundaram, Member (J)
1. The classification of "Offline Keyboard Type 5404 is the issue to be decided in this appeal-the importers claim assessment under Heading 84.34 of the Customs Tariff Act, 1975 while the Department has classified the item under Heading 84.51/55(2).
2. The appellants herein are publishers of "Electronics For You" and "Facts For You" magazines. In May 1983 they imported one complete Photo Type Composing Machine-Model 3560-45 with English/Devnagiri Keyboard and standard accessories from USA. The Photo Composing Machine together with its Key Board was assessed under Heading 84.34. In order to increase the production of their magazines the appellants imported an additional Off-line English Key Board Type 5404 intended to be used as an integral component of Photo Type Setting Machine earlier imported. The Assistant Collector assessed the Key Board under Heading 84.51/55(2) on the ground that the Keyboards can also be used for input for other sources apart from being the input of Photo Type Setting Machine. The lower appellate authority upheld the order of the adjudicating authority holding that the Key Board can interface with computer terminals. Hence this appeal.
3. We have heard Shri A.S. Sunder Rajan, learned Consultant and Shri M.K. Jain, learned SDR and carefully considered their submissions and perused the records.
4. The appellants submit that the Photo Type Setter Key Board has its own programme devised by the manufacturer and it will not take any other programme nor will it take any command from any other computer. The computer terminals have their own Arithmetical Logic Unit known as ALU for computation and also a computer unit which is not so in the case of Keyboard for Photo Type Setters as no Arithmetical calculations are required to be done by this Key Board. Only a straight text is required to be recorded with the help of keystrokes. The Type Setting Keyboard is used only to capture the keystrokes in order to increase the input Data speed of the typesetter and can be used only for printing industry. The Key Board uses a specialized magnetic diskette which offers a storage capacity of 288,000 Key Strokes and provides instant access to selected locations in the copy stream. The Key Strokes are specially designed to capture the software programmes for composing printing material and the system features of the Key Board make it exclusively adapted for use with Photo-type Setting Machine only. In the condition in which it is imported, with its tailor-made printed electronic circuits responding to specific pre-determined software programme, the imported key board is designed only for the operation of the Type Setting Machine. It cannot interface with other computer terminals and is, therefore, not classifiable as parts of Data Processing Machine.
5. The Learned SDR refers to the catalogue of Photo Composing Machine and draws our attention to the optional feature of "General Purpose Interface Port for input form other sources such as other word processors, computers and wire service". He, therefore, submits that the Machine imported can interface with computer terminals as is evident from the manufacturer's catalogue and, he therefore, supports the findings of the authorities below.
6. From the orders of both the authorities below the admitted position that emerges is that the Key Boards are designed for use with Photo Type Setting Machines. The ratio of the order of the Tribunal in the case of Collector of Customs, Calcutta v. Neeraj Newspaper Associates (P) Ltd. reported in 1992 (40) ECR 399, therefore, applies to the facts of this case. The Tribunal therein had held that the Offline Key Boards for English/Devnagiri Type 5404 are to be assessed under Heading 84.34 of the CTA 1975. In that case also the catalogue. revealed that the machines consist of input unit, data storage and play back unit and the Assistant Collector observed that the machine, though designed for use with a Photo Composing Machine, would also be found to be used for input from other sources such as other word processors, computers and wire services (as in the present appeal). The Tribunal relied upon Section Note 3 of Section XVI and Note 5 to Chapter 84 to classify the Offline Key Board under Heading 84.34. The relevant extract from the citation is as below:
While coming to the conclusion both the lower authorities had not looked into the Section Notes and Chapter Notes. The larger Bench of the Tribunal had the occasion to deal with the provisions of Section Notes and Chapter Notes in the case of Saurashtra Chemicals, Porbandar v. Collector of Customs, Bombay . The Tribunal had held that Section Notes and Chapter Notes are part of statutory tariff and the headings are to be interpreted and applied in the light of the Section Notes and Chapter Notes and bound by their overriding force. The details have been discussed by the Larger Bench in paras 4 and 7 of the said judgment. Shri Asthana had referred to Note 3 of Section XVI and Note 5 of Chapter 84 which are reproduced below.
Section XVI
3. Unless the Headings otherwise require, a composite machines consisting of two or more machines fitted together to form a whole and other machines adapted for the purpose of performing two or more complementary or alternative functions are to be classified as if consisting only of that component or as being that machine which performs the principal function Chapter 84
5. A machine which is used for more than one purpose is for the purposes of classification, to be treated as if its principal purpose were its sole purpose.
A simple perusal of these Notes shows that the principal purpose is the sole purpose. The machines imported by the respondents are photo composing machines with display screen for printing. The Department also admits that they are designed for use with photo composing machines....
6. The machine has been assessed under Heading 84.34. In view of Section Note 3 to Section XVI and Note 5 to Chapter 84 and the legal position discussed above, we are of the view that it would be appropriate if the 4 Nos. of 5404 (40K) VDI off-line key boards for English/Devnagiri imported by the respondents are assessed under Heading 84.34 of CTA 1975.
7. Following' the decision supra we hold that the imported items fall for classification under Heading 84.34 of CTA 1975. We set aside the classification determined by the Departmental authorities and allow the appeal with consequential relief.