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2022 (9) TMI 690 - Customs
Classification of imported goods - Benefit of exemption from duty (BCD) - import of data projectors - classifiable under Customs Tariff Item 8528 61 00/ 8628 62 00 as claimed by the appellant or under CTI 8528 69 00 as claimed by the Department? - levy of penalty u/s 114A of Customs Act - HELD THAT:- It is seen that prior to 01.01.2017, CTI 8528 61 00 uses the phrase “of a kind solely or principally used in an automatic data processing system of heading 8471”. Post 01.01.2017, CTI 8528 62 00 uses the phrase “capable of directly connecting to and designed for use with an automatic data processing machine of heading 8471”.
For the period prior to 01.01.2017, goods “principally” used with ADPS are those goods which are inherently capable of connecting with multiple devices but are designed primarily to be used with ADPS. The data projectors imported by the appellant are used with ADPS and merely because they have the capability of use in both ADPS or non-ADPS cannot be a basis for deciding whether the projectors are “principally” used with ADPS. The correct test is to find out whether the specification and features are designed in such a way that they are generally or primarily meant for use with ADPS.
A Division Bench of the Tribunal in Sony India, after referring to the earlier Division Bench decisions of the Tribunal in ACER INDIA (P) LTD. VERSUS CC [2009 (11) TMI 931 - CESTAT AHMEDABAD], COMMR. OF CUS. & C. EX., HYDERABAD-II VERSUS AVECO VISCOMM PRIVATE LTD. [2010 (9) TMI 436 - CESTAT, BANGALORE], COMMISSIONER OF CUSTOMS (I), ACC, MUMBAI VERSUS VARDHAMAN TECHNOLOGY P LTD [2013 (8) TMI 271 - CESTAT MUMBAI], held that the colour data projectors imported by the appellant would be classifiable under CTI 8528 61 00.
The addition of multiple ports in the goods will not take away the basic nature of the goods, which is to work in conjunction with ADPS. This would continue to remain the principal function of the goods. The presence of such ports is only to ensure their use with laptops and ADPS. Therefore, even post 01.07.2017, goods would be classifiable under CTI 8528 62 00 and the decisions of the Tribunal rendered for the period prior to 01.07.2017 will continue to apply to projectors imported w.e.f. 01.01.2007 - It is also seen that for the period prior to 01.01.2017, all good falling under CTSH 8528 41, 8528 51 or 8528 61 were unconditionally exempt from payment of BCD under Serial No. 17 of the exemption notification. Post 01.01.2017, Serial. No. 17 of the notification exempts all goods falling under CTSH 8528 42, 8528 52 or 8528 62 if they are of a kind solely or principally used in an automatic data processing machine of heading 8471. The goods imported by the appellant satisfy the description of the goods in the exemption notification for both the periods and are, therefore, eligible for exemption.
Penalty under section 114A of the Customs Act - HELD THAT:- When there is no mis-declaration, penalty under section 114A of the Customs Act could also not have been imposed - The Department has filed appeals as penalties under section 114AA of the Customs Act have not been imposed. As the appellant has correctly availed the benefit of the exemption notification, the appeals filed by the Department deserve to be dismissed.