Floor-standing office furniture falls under Heading 94.03, while non-floor-standing cabinets remain office equipment under Heading 83.04.

For classification between Heading 94.03 and Heading 83.04, the ative test is whether the goods are designed for placing on the floor or ground. Fire-resistant filing, record, floppy storage and pass book cabinets were held to be floor-standing office furniture and classifiable under Heading 94.03, while the visible recorder cabinet and metal holder, not shown as floor-standing furniture, fell under Heading 83.04 as office or desk equipment. The assessable value was required to be worked out on a cum-duty basis, and penalty was not warranted in view of the bona fide classification dispute and prior classification filings.

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Issues: (i) Whether the fire resistant filing cabinets, fire resistant record cabinets, fire resistant floppy storage cabinets and pass book cabinet were classifiable under Heading 94.03 as office furniture or under Heading 83.04 as office equipment; (ii) whether the visible recorder cabinet and metal holder were classifiable under Heading 83.04; (iii) whether the assessable value was to be worked out on cum-duty basis and whether penalty was imposable.

Issue (i): Whether the fire resistant filing cabinets, fire resistant record cabinets, fire resistant floppy storage cabinets and pass book cabinet were classifiable under Heading 94.03 as office furniture or under Heading 83.04 as office equipment.

Analysis: Heading 83.04 covers filing cabinets and similar office or desk equipment of base metal, but only where the goods are not office furniture of Heading 94.03. Note 2 to Chapter 94 requires articles under Heading 94.03 to be designed for placing on the floor or ground. The products in question were found to be of a size and nature that they were designed to stand on the floor and were used in offices for utilitarian purposes. Once so designed, they answer the description of office furniture under Heading 94.03.

Conclusion: The goods at Sl. Nos. 3 to 7 were classifiable under Heading 94.03, against the assessee.

Issue (ii): Whether the visible recorder cabinet and metal holder were classifiable under Heading 83.04.

Analysis: The visible recorder was shown in the catalogue as placed on a stand, and the metal holder was not shown to be designed for placement on the floor or ground. On that basis, they fell within Heading 83.04 as office or desk equipment and not as furniture of Heading 94.03.

Conclusion: The visible recorder cabinet and metal holder were classifiable under Heading 83.04, in favour of the assessee.

Issue (iii): Whether the assessable value was to be worked out on cum-duty basis and whether penalty was imposable.

Analysis: Where duty is recoverable from the transaction price, the assessable value has to be worked out by treating the price as cum-duty price. In the absence of culpable conduct and in view of the bona fide classification dispute and prior filing of classification lists, penalty was not warranted.

Conclusion: The price was to be treated as cum-duty price and the penalty was set aside, in favour of the assessee.

Final Conclusion: The classification was upheld for some goods under Heading 94.03 and for the remaining goods under Heading 83.04, with consequential relief on valuation and complete deletion of penalty.

Ratio Decidendi: For classification between Heading 83.04 and Heading 94.03, the decisive test is whether the goods are designed for placing on the floor or ground; goods so designed and used as office furnishings fall under Heading 94.03, while office equipment not so designed remains under Heading 83.04.

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