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2016 (11) TMI 847 - CESTAT MUMBAI

2016 (11) TMI 847 - CESTAT MUMBAI - TMI - Eligibility for concessional rate of additional duty of customs in accordance with N/N. 6/2006-CE dated 1st March 2006 and N/N. 12/2012-CE dated 17th March 2012 - classification of imported goods - ‘external hard disks’ classified under heading 84717030 or 84717040 of the Schedule of the Central Excise Tariff Act, 1985? - Held that: - Under Customs Act, 1962 each import is assessed on its own merits and upon the contents of the declaration in the bill of .....

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ime nor can it be a valid defence that acceptance of declaration in a past import is an acknowledgement of declaration having been true and correct. - It is not uncommon for importers to align description of imported goods, not with the tariff entries, but with descriptions in exemption notification and continuing with that description until the misdeclaration is unearthed. The differential duty is adequate motive for suppression of facts relevant to assessment. The notice issued to appellan .....

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rejected - decided against appellant. - C/85678, 85893, 85896 & 85898/2015 - A/90720-90723/16/CB - Dated:- 4-10-2016 - Shri M V Ravindran, Member (Judicial) and Shri C J Mathew, Member (Technical) Shri T. Viswanathan, Advocate for the appellants Shri V.K. Singh, Special Counsel for the respondent ORDER Though the dispute before us is purportedly one of classification of external hard disks under heading 84717030 or 84717040 of the Schedule of the Central Excise Tariff Act, 1985, it is, in reali .....

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han motherboards, (b) floppy disc drive (c) hard disc drive (d) CD-ROM drive (e) DVD Drive/DVD writer (f) flash memory and (g) combo drive. Commissioner of Customs (Import), Air Cargo Complex, Sahar, vide order-in-original no. CC-RS/08/2014-15 ACC (Adj) (I) dated 28th November 2014, denied them the exemption under this notification and, instead, allowed them the benefit of notification no.2/2008-CE dated 1st March 2008 at 10% till 16th March 2012 and at 12% thereafter. The two impugned orders ad .....

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vable in the description relating to heading 84717030 of the Schedule to the Central Excise Tariff Act, 1985 is applicable to external storage devices; that hard disks, by addition of circuits/connection interfaces/enclosures, lose their character to become removable disk drives for which reliance was placed on decision of the Tribunal in Collector of Customs, Madras v. Pragati Computers [1997 (96) ELT 342 (Tribunal)]; and that whether rule 3 (a), 3 (c) or 4 of General Rules for Interpretation o .....

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able hard disks may be internal or external. Further, describing the external hard disk drive, it was pointed out that external and internal devices differ only in the casing that encloses the former and that the connection to the computer distinguishes the external from the internal and not the removable from the fixed. It is also argued that the imported item is commercially known as hard disk ; as the Drive is fused to the disk in the imported products, it is not amenable to classification as .....

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f Customs & Central Excise v. Tata Consultancy Services Ltd [2008 (221) ELT 217 (T)] which allowed the benefit of exemption to hard disk array which was not classified as 84717020 but as 847177090. Likewise, the explanatory letter from Central Board of Excise & Customs elaborating the budgetary changes of fiscal 2015 was put forward to reinforce the prevalence of description over the classification. Reliance was placed on Commissioner of Customs & Central Excise, Hyderabad II v. Tata .....

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se, Surat - I [2002 (145) ELT 430 (Tri.-Mumbai)]; Commissioner of Central Excise, Mumbai - III v. Narendrakumar & Co. [2008 (232) ELT 866 (Tri. Mumbai)]; Commissioner of Customs, Amritsar v. Jyoti Industries [2007 (209) ELT 180 (P&H)]; Neotric Informatique Ltd v. Commissioner of Customs (Import), Nhava Sheva [2015 (318) ELT 701 (Tri.-Mumbai)]; Devraj M. Salian v. Commissioner of Customs (I), Mumbai 2015 (316) ELT 139 (Tri.-Mumbai)]; Commissioner of Customs, Calcutta v. G.C. Jain [2011 (2 .....

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mp; Allied Products Pvt. Ltd. [2006 (202) ELT 213 (SC)]; Commissioner of Customs, Bangalore v. Acer India Pvt Ltd [2007 (218) ELT 17 (SC)] and BPL Mobile Communications Ltd v. Commissioner of Customs, ACC, Mumbai [2000 (126) ELT 986 (Tribunal)]. 5. Learned Special Counsel took us through the investigations undertaken by the Directorate of Revenue Intelligence and also the grounds on which the adjudicating authority returned his finding of classification. He relied upon the decisions of the Hon b .....

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v. Commissioner of Customs, Mangalore; Hitachi Home & Life Solution Ltd v. Commissioner of Customs (Import), Nhava Sheva [2012 (285) ELT 504 (Tri.-Mumbai)]; Samsung India Electronics Ltd v. Commissioner of Customs, New Delhi [2014 (307) ELT 160 (Tri.-Del.)]; Commissioner of Customs, Chennai v. Hewlett Packard India Sales (P) Ltd [2007 (215) ELT 484 (SC)]; Nestle India Ltd v. Commissioner of Central Excise, Goa [2008 (227) ELT 631 (Tri.-Mumbai) and Steag Encotec India Pvt Ltd v. Commissioner .....

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eal by its consistency which is a consummation arising from compliance with the rules of interpretation and uninfluenced by technical opinion or the revenue-driven motives. 7. The relevant exemption notification specifies the products that are entitled to the privileges of the notification. In addition, the relevant entries do incorporate the classification upto the sixth digit in relation to goods falling in chapter 84. Entry 847170 is for storage units which, in computer technology, are many a .....

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o this matter. 8. We do not have any definition within the tariff to fall back on. We are also bereft of any ruling in a decision of the Tribunal, High Courts or the Hon ble Supreme Court. We are not favoured by any assistance from the decision in re Tata Consultancy Services Ltd dealing, as it does, with the convergence of disk array with hard disc drive; it must be noted that, unlike in the present dispute between two specific entries, one of the rival entries had not the pretence of specifici .....

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exist; it cannot be so premised if technical expertise has, necessarily, to be resorted to for interpretation. To put it succinctly, it is the trade parlance that should determine the proximity to a description if the meaning of the description is not adequately clear. We, therefore, prefer to discard the opinions of technical experts furnished by the appellant. 10. The contention of the appellant that the description in the exemption notification should prevail over the classification numerals .....

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st qualification, will also have to pass the muster of the second, i.e. the description, which may or may not replicate the entry in the tariff itself. That is a natural corollary of exemption notifications being instruments for implementation of policies of the government. 11. That the common understanding of the commercial world is the key to determination of the classification has been laid down by the Hon ble Supreme Court in Union of India v. Garware Nylons Ltd [1996 (87) ELT 12 (SC)] and I .....

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This is particularly so in a hard disk drive which is essential for the computer to perform its assigned tasks. The floppy disc driven computers barely lasted a short period of the 1980s. Floppy discs were removable and hence did not require distinguishing from the drive which was in the machine. Likewise, the media of DVD drives or compact discs are distinct from the drive within the machine and these are optionals in the modern computer. However, the hard disk drive - at least, the primary on .....

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er storage facility. Even to access the data on the portable hard disc, the operating system on the fixed hard disc is necessary. Therefore, the disc drive, even if designated within the computer environment as a hard disc drive, will be a removable or exchangeable disc drive if it is external to the the housing of the computer and does not carry the operating system to enable its use without resort to the internal hard disc. It is not the claim of the appellant that the hard discs imported by t .....

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f, render its classifiable as a removable hard disc that is distinguished from the fixed internal hard disc. 14. Without doubt, these portable hard disc drives have been imported at different places and at different times; it is also not in dispute that these have been allowed clearance on these occasions. It is the contention of the appellants that these have been examined before clearance and that, with the declaration of portability in the bills of entry, the assessing officers should have re .....

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