2005 (12) TMI 96 - SUPREME COURT

Whether the telephone LSP 340 imported would be entitled to the benefit of the exemption granted by Customs Circular No. 57/2003 dated June, 2003 to Cellular Telephones classified under Tariff Heading 8525-17 of the Customs Tariff Act?

Held that:- Since the issue would be ultimately a question of evidence the onus was on the Department to prove by appropriate evidence that the goods were classifiable under 8525-20-19 being the residuary entry. This the Department could have done by negativing the claim of the importers that the goods were classifiable under Tariff Entry 8525-20-17 and by establishing that the imported goods could not reasonably be classified under any other head. In this particular case the onus had not been discharged by the Revenue. The only evidence on record was the opinion sought for by the Ministry of Finance itself and given by the Department of Telecommunications to the effect that the Model LSP 340 was in fact covered by the phrase "cellular telephone". Sine there is no dispute that the technology used in LSP 340 and the hand held mobile phone is the same there is no warrant to limit either the tariff entry or the exemption notification to hand held cellular phones. Neither the range nor the size would make any difference.Therefore, Civil Appeal Nos. 3774-3775/05 from the decision of the Andhra Pradesh High Court is dismissed.

As far as CA. No. 7939 of 2004 is concerned, the Commissioner, on the issue of valuation, had drawn a distinction between loaded software and detached software. The Commissioner had given certain reasons for including the software in the valuation of the phone. The Tribunal has dealt with the matter in a somewhat perfunctory a manner. We do not express any view on the merits of the valuation. However, we are of the view that the matter requires more consideration by the Tribunal. Therefore, on the question of valuation alone, we remand case back to the Tribunal for redeciding the issue. All questions relating to the valuation of the LSP 340 imported by respondent in that appeal are left open.