Customs, Excise and Gold Tribunal - Delhi
Xerox Modicorp. Ltd. vs Commissioner Of Customs on 5 November, 2002
Equivalent citations: 2003(85)ECC477, 2003(151)ELT186(TRI-DEL)
ORDER V.K. Agrawal, Member (T)
1. The issue involved in this appeal, filed by M/s. Xerox Modicorp. Ltd., is whether the machines imported by them, performing the function of a printer, scanner and copier, based on Digital Technology, is classifiable under sub-heading 8471.60 of the First Schedule to the Customs Tariff Act as claimed by them or under subheading 8479.89 as confirmed by the Commissioner (Appeals) under the impugned order.
2.1 Shri R. Parthasarthy, learned Advocate, submitted that the appellants are engaged in the trading of High Technology Reproduction and Duplicating Machines, Facsimile machines, Printers and Multifunctional machines capable of discharging number of functions; that they imported the following machines -
(i) Xerox Regal 5799
(ii) Xerox Work Centre XD 100
(iii) Xerox Work Centre XD 155 df 2.2 He mentioned that as the machines were primarily printers, meant for use with an Automatic Data Processing Machine, they claimed classification under sub-heading 8471.60 of the Tariff; that the catalogue of Xerox Regal 5799 clearly shows that the said digital printer/copier provides connectivity under any computing environment; that the said machine provides connectivity solutions including Fiery Family, Splash in a variety of configurations to support a wide array of network demands; that the said machine is principally a colour printer for ADP devices and networks; that the components and sub-systems for the printing function account for over 85% of the total parts/components and also direct manufacturing cost; that the classification of a similar machine (Regal 5790) was considered by the United States Customs which had held it to be a laser printer for ADP and had classified the same under 8471.60.
2.3 He, further, mentioned that catalogue of the Document Work Centre XD 100 shows it to be a copier and printer; that the laser printer prints 8 pages per minute windows printing and that printer cable is included; that the Printer Works under Microsoft Windows 98, 3.1, 95 and NT 4.0 drivers; that the minimum system requirement indicated is 486 are better, win 3.1 etc.; that this clearly shows that the impugned machine is principally designed for providing connectivity to an ADP.
2.4 Regarding Xerox Work Centre XD 1555 df, he said that this machine also provides 8 PPM laser printing and the printer specifications are the same as that of XD 100 and it is also designed principally to be connected to an Automatic Data Processing machine; that the same machine imported earlier was classified as a printer.
3. The learned Advocate also submitted that once the multifunction machine is held to be an input-output unit, then by virtue of Note 5D to Chapter 84 read with Note 5B(b) and Note 5B(c), it should be classified under Heading 84.71. He relied upon the decision in the case of Xerox Modi-corp. Ltd. v. C.C., Mumbai, 2001 (130) E.L.T 165 (T) wherein the Xerox Document Work Centre 365c was classified under sub-heading 8471.60. Reliance has also been placed on the decision in the case of MX Software Services Ltd. v. CC, Mumabi, 2001 (131) E.L.T. 422 (T) wherein the Xerox Document Centre DCS 230 ST was classified under sub-heading 8471.60 read with Note 5D and Note 5B(a) as it was basically designed as a laser printer.
4. Countering the arguments, Ms. Neeta Lal Butalia, submitted that the impugned machines are capable of functioning independently without being connected to an Automatic Data Processing Machine; that as Per Note 5E to Chapter 84, machines performing a specific function other than data processing and incorporating or working in conjunction with an automatic data processing machines are to be classified the headings appropriated to their respective function or failing that in the residual heading; that the impugned machines are not printers simpliciter which are attached to computers; that printing cannot be termed to be pre-dominant function in a multi-function machine; that at the time of personal hearing before the Deputy Commissioner the representative of the appellants had summed up the features of the impugned machines according to which the machine functions as copier and printer and incorporate digital roster output scanner which is capable of scanning on original document and stores it in digital forms and prints thereof can be produced via an electrostatic laser printing; that the functions performed are inseparable; that the relied upon decisions are not applicable as models are different and the issues involved are different.
5. We have considered the submissions of both the sides. The rival Tariff Headings read as under :
"84.71 - Automatic data processing machines and units thereof; magnetic or optical readers, machines for transcribing data on to data media in coded form and machines for processing such data, not elsewhere specified or included.
8471.60 - Input or output units, whether or not containing storage units in the same housing.
84.79 - Machines and Mechanical appliances having individual functions, not specified or included elsewhere in this Chapter.
8479.10 to xxx 8479.60 Other machines and mechanical appliances 8479.89 - Other"
6. The impugned machines admittedly are multi-function machines based on digital technology and performing the function of a printer, scanner and digital copier. The appellants want to classify these multi-function machines under sub-heading 8471.60 on the ground that the printing is predominant function of these machines and they provide connectivity to an automatic data processing machine. The Revenue has, on the other hand, contended that these are not printers simpliciter which are attached to an ADP machine. According to the catalogue, Xerox Regal 5799 Copier/Printer is simple to calibrate and use and delivers high-quality colour output and it functions as a copier and a printer; it is a dependable addition to any document production environment, especially those that want to use the Regal 5799 to generate a Revenue stream from premium quality, short run, colour printing. The catalogue also mentions that "no matter what environment you're in, you get the highest quality and the most productivity possible." It is also mentioned that the Xerox platform is an open system with plug and play connectivity in virtually any computing environment. It is thus apparent that the said machine is not solely or principally used in an automatic data processing machine. Note 5 (B) to Chapter 84 applies only if all the conditions specified therein are satisfied. One of the condition is that the unit "is of a kind solely or principally used in an automatic data processing system." It is also apparent from the specification that Regal 5799 provides connectivity to extend the capabilities. Similarly the Catalogue of both Work Centre XD 100 and Work Centre XD 155 df no where mentions that these are units of a kind solely or principally used in an automatic data processing system. Merely because Work Centre XD. 100 does 8 PPM Windows printing and Printer Cable included the machine cannot be claimed to be solely or principally used in an automatic data processing machine. The decisions relied upon by the appellants are not applicable as in the case of Xerox Modicorp Ltd. the contending tariff sub-headings were 8471.60 and 9009.21. Further in the case of MX Software Services Ltd., the Machine involved was a different Document Centre DCS 230ST and the Tribunal has reached the conclusion that the principal function was digital printing and in terms of Note 5(D), the product was held to be classifiable under sub-heading 8471.60. Moreover the findings of the Tribunal in the said decision was that the said product was solely or principally used in an automatic data processing system whereas in the present matters the impugned machines are not of a kind solely or principally used in an automatic data processing system. Accordingly, we uphold the classification confirmed in the impugned order and reject the appeal.