Exemption for hard disk drives extends to external portable drives when technical evidence distinguishes them from exchangeable disk drives.

An exemption notification covering tariff heading 8471 70 for hard disk drives was interpreted to include external portable hard disk drives because the term was not limited to internal drives. Technical literature, sample comparison and expert opinion showed that the imported goods were distinct from removable or exchangeable disk drives in structure and function, so they were classifiable under heading 8471 70 20 and eligible for concessional duty; the Revenue's contrary classification failed.

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Issues: Whether imported external hard disk drives were correctly classifiable under Tariff Heading 8471 70 20 so as to qualify for concessional countervailing duty, or whether they fell under Tariff Heading 8471 70 30 as removable or exchangeable disk drives and were ineligible for the exemption.

Analysis: The exemption notification covered tariff heading 8471 70 and described the relevant goods as hard disk drive without qualifying them as internal or external. The imported goods were examined along with their technical literature and sample comparison, and they were found to be hard disk drives meant for external use as plug-in portable devices. The distinction drawn by the Revenue between external hard disk drives and removable or exchangeable disk drives was not accepted, as the latter were technically different in structure and function. The expert opinion of the competent Ministry also supported the view that external or portable hard disk drives were not exchangeable disk drives.

Conclusion: The imported goods were held to be external hard disk drives classifiable under Tariff Heading 8471 70 20 and eligible for concessional duty. The Revenue's challenge failed.

Final Conclusion: The classification adopted by the appellate authority was upheld and the Revenue's appeal was rejected.

Ratio Decidendi: Where an exemption notification covers hard disk drives under a tariff heading without restricting the term by reference to internal or external use, external portable hard disk drives cannot be denied the benefit merely by equating them with removable or exchangeable disk drives when technical evidence shows them to be different.

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