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of <h1>Tribunal Upholds Classification of Add-On Cards as per Central Excise Tariff Act</h1> The Tribunal upheld the Department's classification of add on cards under Heading 84.73 of the Central Excise Tariff Act, 1985, dismissing the appellants' ... Classification Issues: Classification of add on cards under Central Excise Tariff Act, 1985.Issue 1: Classification DisputeThe case involved a dispute regarding the classification of add on cards under the Central Excise Tariff Act, 1985. The appellants initially cleared the cards under Chapter Heading 8471.00 at a duty rate of 15% ad valorem. However, due to an audit objection, the classification was proposed to be under 8473.00 with a duty rate of 20% ad valorem. The appellants were issued show cause notices for differential duty amounts, which were confirmed based on previous judgments. The appellants argued that the adjudicating authority did not provide tangible grounds for the classification under Heading 84.73 and that they had initially classified the product under Heading 84.71 at the Department's direction. The appellants contended that the cards should be classified under Heading 84.71 based on various technical and legal arguments, including references to relevant case laws and HSN notes.Issue 2: Principles of Natural JusticeThe appellants further contended that the adjudicating authority's order violated the principles of natural justice as he did not discuss or record findings on the grounds presented by the appellants. The appellants argued that they were not given proper justification for changing the classification from Heading 84.73 to 84.71 and that the duty paid under one heading should not be adjustable under another heading. They relied on various decisions to support their contentions regarding the duty adjustment and entitlement to refund. The appellants also highlighted that the Department had not filed an appeal, making the impugned order final against them.Issue 3: Arguments and CounterargumentsThe Revenue argued that add on cards are additional devices to enhance capacity and should be classified under Heading 8473 as accessories. They referred to specific notes in Chapter 84 of the Tariff Act to support their contention. The appellants, on the other hand, based their argument on the HSN and technical aspects, claiming that the add on cards are functionally independent units. They referenced specific points in the HSN to support their classification under Heading 84.71.Judgment:The Tribunal dismissed the appeal, upholding the classification done by the Department under Heading 84.73. The Tribunal found no documentary evidence or cogent reasons presented by the appellants to change the classification from Heading 84.73 to 84.71. The Tribunal emphasized that the appellants had consistently classified the item under Heading 84.73, and thus, there was no basis to interfere with the Department's classification decision. Additionally, another Member of the Tribunal concurred with the classification under Heading 84.73, citing previous Tribunal decisions that add on cards cannot be considered automatic data processing machines themselves and are to be classified under Heading 84.73. The Member referenced specific case laws and technical aspects to support this classification decision.
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