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37. In short, this is simply a case of two conflicting views about classification of the imported goods. We now proceed to decide the questions formulated by us in paragraph 22 above. Are the imported viewing cards/smart cards classifiable under CTI 8523 52 90 as was done in the Bills of Entry or under CTI 8529 90 90 as held in the impugned order?

38. According to Videocon, the viewing cards/smart cards are goods in themselves and they are not part of the Set Top Boxes into which they are inserted. They were imported separately and not along with the STB. The mere fact that they are used with the STBs and have no other use will not, according to Videocon, make them parts of the STBs. Even the 25 C/51007 OF 2020 & 4 others fact that the viewing cards/smart cards are customized to Videocon and that they cannot be used with the STBs of other D2H service providers, will not, according to Videocon, make them parts of the STBs.

51. Since the ADG (Adj.) found that the cards do not fall under CTI 8523 52 90, and that they are not goods in themselves but are parts of Set Top Boxes, he held that the parts should be classified as per Section Note 2(b) to Section 36 C/51007 OF 2020 & 4 others XVI. This Note, as can be seen says that parts should be classified as follows:

(a) If the parts are goods included in any of the headings of Chapter 84 or 85 (other than headings 8409, 8431, 8448, 8466, 8473, 8487, 8503, 8522, 8529, 8538 and 8548) they are in all cases to be classified in their respective headings;

(c) all other parts are to be classified in heading 8409, 8431, 8448, 8466, 8473, 8503, 8522, 8529 or 8538 as appropriate or, failing that, in heading 8487 or 8548.

52. According to Videocon, the cards imported by it are goods falling under CTI 8523 52 90. Therefore, even if they are considered as parts of STB, as per (a) above, they deserve to be classified under this CTI.

53. The ADG (Adj.), on the other hand, held that they are not goods falling under CTI 8523 52 90 and therefore, classified them as per Section Note 2(b) as parts of Set top boxes under CTI 8529 90 90.

60. Clearly, the viewing card/smart card inserted into the set top box of DTH service provider is a good in itself and is not a part of the set top box.

61. The re-classification of the goods in the impugned order from CTI 8523 52 90 to CTI85299090 cannot be sustained and deserves to be set aside.

Can the demand of duty invoking extended period of limitation under section 28(4) be sustained?

62. Since we have found that the re-classification of the goods under CTI 8529 90 90 cannot be sustained, neither can the consequential demand of duty be sustained.