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TMI Blog2020 (3) TMI 856X X X X Extracts X X X X X X X X Extracts X X X X ..... 7. 3. The issue that arises for consideration in the Appeals is about the classification of colour data projectors imported by Sony India. According to Sony India, the said projectors would fall under Heading 8528 61 00 of the First Schedule to the Customs Tariffs Act, 1975 and thereby entitled to exemption from payment of Customs Duty under Notification dated 1 March, 2005, while according to the Revenue, they would fall under Heading 8528 69 00 and not entitled to any exemption from payment of Customs Duty. The period of demand is from 11 April, 2012 to 16 March, 2013. 4. Sony India is a company registered under the provisions of the Companies Act, 1956 and deals with various categories of electronic products. It is engaged in the import and sale of projectors in India, including data projectors and video projectors. All the data projectors including, colour data projectors are imported from Hong Kong by classifying them under 8528 61 00. It needs to be noted that prior to August, 2011, the Appellant was importing the colour data projectors by classifying them under 8528 69 00, but in view of two decisions of the Tribunal in Commissioner of Customs and Central Excise, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sulted in short levy of Customs Duty amounting to Rs. 2,20,97,287/-. The show cause notice further mentioned that it appeared that the Appellant had wilfully suppressed facts by misdeclaring the subject goods under 8528 61 00 instead of 8528 69 00 and since the Appellant wilfully suppressed facts, it was liable to pay duty under Section 28(4) of the Customs Act, 1962 [the Customs Act] and also liable to pay interest on the short-paid duty under Section 28(AAA) of the Customs Act. 8. A detailed reply was filed by the Appellant on 3 May, 2017 mentioning therein that since the colour data projectors fulfilled the requirement of being used solely or principally with Automatic Data Processing [ADP] machines, the goods would be classifiable under 8528 61 00 and in support of this submission various decisions of the Tribunal were relied upon. Additional submissions were also filed by the Appellant, which were received by the Commissioner on 18th July, 2018. Personal hearing had also earlier taken place on 12th July, 2018. The decisions of the Tribunal on the issue were placed and it was also stated that currently the goods were being classified under 8528 62 00 (the Heading number h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mana, Justice R. Banumathi, Justice Mohan M. Shantanagoudar and Justice S. Abdul Nazeer in their Judgment dated 30 July, 2018 in the Civil Appeal No. 3327 of 2007 of Commissioner of Customs (import), Mumbai v. M/s. Dilip Kumar and Company & Org. has held that : (i) Exemption notification should be interpreted strictly; the burden of proving applicability would be on the assessee to show that his case comes within the parameters of the exemption clause or exemption notification. (ii) When there is ambiguity in exemption notification which is subjected to strict interpretation, the benefit of such ambiguity cannot be claimed by the subject/assessee and it must be interpreted in favour of the Revenue. (iii) The ratio in Sun Export Case (supra) is not correct and all the decisions which took similar view as in Sun Export Case (supra) stand over-ruled. 5.9 In view of the above Judgment dated 30 July, 2018 of the Constitutional Bench of Hon'ble Supreme Court of India, I find that all the judgments as relied upon by the Noticee in the instant case are based on the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... about the change of classification of the imported goods by letter dated 11-8-2011 attached with the reply of the Noticee. On perusal of the said letter, I find that there is a mention therein of particular goods as covered under a specific bill of entry and it did not refer to any particular change of policy about classification of particular evidence with their reply to the said Show Cause Notice. The Noticee has failed to submit any documentary evidence with their reply to the said Show Cause Notice to substantiate their claim of acceptance by the department about their submission of change of classification of a particular imported Goods. 5.10.12 Also, the claim of the noticee that they have informed the department about the change of classification, does not hold water inasmuch as that had it been so, department would not have assessed the said imported goods by classifying them under CTH 8528 69 00 for the subsequent period. 5.10.13 Therefore, the provisions of Section 28(4) of the Customs Act, 1962 has rightly been invoked in the said Show Cause Notice for the extended period in the instant case for the reason of suppression of facts by the Noticee from the dep ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ............................ u 10% - Reception apparatus for television, whether or not incorporating radiobroadcast receivers or sound or video recording or reproducing apparatus : 14. Learned Counsel for the Appellant has made the following submissions : (i) The colour data projectors imported by the Appellant are projectors of a kind solely or principally used in an automatic data processing system of heading 8471 and would fall under heading 8528 61 00; (ii) The term "solely" as defined in Merriam-Webster refers to the exclusion of all. Hence, the first category of projectors needs to have a single use, viz. used only with ADPS. Projectors fulfilling such criteria will be restricted in their functionally and specifications such that they can work only with ADPS; (iii) Goods which are "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. That is, goods should have functionality and specifications that allow these devices to work optimally with ADPS. It also implies that the o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as also the Explanatory Notes; (iii) The description of Monitors of a kind of solely or principally used in an automatic data processing system of heading 84.71 at A, will also apply for Projectors. What has been mentioned is that the group includes monitors which provide a graphical presentation of the data processed and these monitors are distinguishable from other types of monitors and from television receivers which include those monitors which are capable of accepting a signal only from the central processing unit of an automatic data processing machine and, therefore, are not able to reproduce a colour image from a composite video signal; (iv) The decisions, on which reliance has been placed by the Learned Counsel of the Appellant, have not taken into consideration the aforesaid provisions of the HSN and the Explanatory Note; (v) Thus, projectors which are capable of accepting a signal only from a central processing unit of an automatic data processing machine would fall under 8528 69 00. 16. We have considered the submissions advanced by Learned Counsel for the Appellant and the Learned Authorised Representative of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has been classified by the original authority in the residual category 8528.69. The impugned exemption Notification No. 24/2005, dated 1-3-2005 as amended during the relevant period exempts all goods falling under sub-heading 8528.61. The description under the sub-heading 8528.61 uses the expression "of a kind solely or principally used". From the arguments advanced before us as well as from the details furnished, we find that the impugned projectors are principally used for data projection by being connected to either a laptop or a desktop computer. DVDs can also be played from the DVD drive of a laptop and desktop computer through the projector apart from projecting 'power point' presentations, 'word' files, 'excel' charts etc. It seems to have weighed with the lower appellate authority that the projectors also had video compatibility as mentioned in the relevant catalogue. But such video compatibility does not come in the way of the impugned goods being classified under SH 8528.61 so long as the principal use of all such projectors with laptop and desktop computer systems is not doubted and as the sub-heading covers both 'sole use' as well as 'principal use'. Looking at the feat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Tribunal in Aveco Viscomm, that the data projectors would be classified under Heading 8528 61 00. The relevant portion of the decision is reproduced below : "6. We have carefully considered the submission and perused the record. The Department has contended that only those kinds of projectors can be classified under CTH 8528 61 00 which are solely or principally for use in an automatic data processing system of heading 8471. Since these projectors are having additional feature like composite Video Port, S-Video Port, HDMI, RCA Audio Stereo besides VGA, DVI, USB ports, they cannot be said to be meant for use solely or principally in an automatic data processing system of Heading 8471. The only dispute is that they are having additional features which make them not classifiable under 8528 61 00. We find from the records of the case that the product combines the computing power of a computer with large screen display provided by an inbuilt projection system to deliver powerful outcomes through the use of technology for large screen projection to a wider audience. The projection system cannot be used in isolation but replace the functionality of a monitor. The projectors merely ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 27. A perusal of the aforesaid order of the Supreme Court passed in the Civil Appeal filed by the Department to assail the order of the Tribunal in M/s. Epson India Pvt. Ltd. would show that the Supreme Court saw no reason to deviate from the view expressed by the Tribunal, particularly, when the Tribunal had decided the matter following earlier decisions of the Tribunal which had attained finality, including on account of the dismissal of the two Civil Appeals by the Supreme Court. 28. In view of the aforesaid judgments of the Supreme Court and the decisions of the Tribunal, it has to be held that the colour data projectors imported by Sony India are classifiable under Heading 8528 61 00. 29. Learned Authorised Representative of the Department, however, made an attempt to support the impugned order of the Commissioner by placing reliance on the Explanatory Notes to the Harmonised System of Nomenclature contained in Chapter 85. The relevant provisions, on which reliance was placed by Learned Authorised Representative of the Department, are reproduced below : "85.28 Monitors and projectors, not incorporating television reception apparatus; reception apparatus fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... been contended by Learned Authorised Representative of the Department, then too it would not be possible to accept the contention of the Learned Authorised Representative of the Department that the Projectors would fall under Heading 8528 69 00. What has to be seen is whether the Projectors are of a kind solely or principally used in an ADP system of heading 8471 and this issue has been elaborately examined in the aforesaid decisions of the Tribunal. Thus, the judgments of the Supreme Court and the decisions of the Tribunal cannot be ignored even if they have not considered the aforesaid (A) contained in Chapter 85 of the Explanatory Notes to the Harmonised System of Nomenclature, which as noticed above, has no bearing on the issue at hand. 32. What remains to be examined is whether the colour data projectors falling under 8528 61 00 are covered by the Exemption Notification, once the classification of the colour data projectors is found to be under 8528 61 00. 33. The General Exemption Notification dated 1st March, 2005 now needs to be examined and it is as follows : "GENERAL EXEMPTION NO. 163 Exemption to goods of specific heading, from Customs Duty (ITA Bound). - ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and the decisions of the Tribunal is that the judgment of the Supreme Court in Dilip Kumar has rendered the earlier judgments of the Supreme Court and the decisions of the Tribunal as "not relevant and legally tenable". The findings of the Commissioner, on this aspect, have been reproduced in paragraph 9 of this Order, but it is considered appropriate to restate the findings in short and they are as follows : (i) The judgments of the Supreme Court and the decisions of the Tribunal relied upon by the Appellant are based on the ratio of judgment of Supreme Court in Sun Export Corporation, Bombay v. Collector of Customs, Bombay [1997 (6) SCC 564 = 1997 (93) E.L.T. 641 (S.C.)]; (ii) In Sun Export, the Supreme Court observed that any ambiguity in a tax exemption provision or notification must be interpreted in favour of the assessee; (iii) The Constitution Bench of the Supreme Court in Dilip Kumar observed that an exemption notification should be interpreted strictly and when there is ambiguity in an exemption notification, the benefit of such ambiguity must be interpreted in favour of the Revenue; (iv) The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case that neither was it the case set up by the Appellant that exemption from payment of Customs Duty should be granted in view of the decision of the Supreme Court in Sun Export Corporation, nor do the decisions of the Tribunal place reliance upon the decision of the Supreme Court in Sun Export Corporation. The Commissioner on his own made out a case that the Appellant was claiming exemption from payment of duty on the basis of the decision of the Supreme Court in Sun Export Corporation and then proceeded to determine the issue. The Commissioner, it can be said, created a 'ghost' and then tried to kill it. 39. The Commissioner could not have in such a casual manner distinguished the binding judgments of the Supreme Court and the decisions of the Tribunal. The Commissioner should have realised that the Civil Appeals filed by the Department before the Supreme Court against the decisions of the Tribunal in Aveco Technology and M/s. Epson India had also been dismissed. The dismissal of the Civil Appeals by Supreme Court resulted in merger of the decisions of the Tribunal in the Order of the Supreme Court. If the Commissioner intended to distinguish the binding decisions, it was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ance placed by the Commissioner on the judgment in Dilip Kumar is, therefore, misplaced, and it appears that reliance was placed only to overcome the binding decisions. 42. Such an approach of the Commissioner would amount to judicial indiscipline and impropriety. This is what as was observed by the Supreme Court in Union of India v. Kamlakshi Finance Corporation Ltd. [1991 (55) E.L.T. 433] the Supreme Court noticed that the order passed by the Assistant Collector not only ignored the order of the Collector (Appeals) remanding the matter, but also distinguished the decision of the Tribunal by observing that the decision of the Tribunal had not been agreed to by the Department as an Appeal had been filed in the Supreme Court. The assessee filed a writ petition in the Bombay High Court to challenge the said order of the Assistant Collector. The High Court not only quashed the order passed by the Assistant Collector but also directed the Department to allocate the matter to a competent officer for passing a proper order. It is against this decision of the Bombay High Court that the Union of India preferred an Appeal before the Supreme Court. The Supreme Court observed as follows ..... X X X X Extracts X X X X X X X X Extracts X X X X
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