2022 (1) TMI 1078 - AT - Customs

Classification Dispute Resolved: Tribunal Rules in Favor of Appellant

Cloudwalker Streaming Technologies Pvt Ltd Versus Commissioner of Customs (NS-V), Raigad

The appellant, M/s Cloudwalker Streaming Technologies Pvt Ltd, imported 'interactive intelligent panel (automatic data processing machine) model - ... Classification of imported goods - interactive intelligent panel (automatic data processing machine) model – cloudtouch - covered by heading 8471 of First Schedule to Customs Tariff Act, 1975 or under 8528 5900 of First Schedule to Customs Tariff Act, 1975? - discharge of burden to prove - HELD THAT:- The heading deployed by customs authorities pertains to ‘monitors and projector’ and, while the impugned goods may appear to have some of the characteristics of ‘monitors’, it is abundantly clear from the descriptions in the catalogue that these do contain a central processing unit and does operate on software that requires an input device which, though not be different from that for computers and other automatic data processing machines, functions on its own. Therefore, the goods in question cannot be said to be merely projectors or monitor and, thereby, renders recourse to heading 8528 of the First Schedule to the Customs Tariff Act, 1975 to be inconsistent with the General Rules for Interpretation of the Import Tariff. In accordance with the judicial decisions on discharge of the onus devolving on the assessing authority, and without going into the conformity of the description adopted in the bill of entry, it can safely be held that the revised classification does not bear the authority of law. Furthermore, as it is not controverted that the said exemption notification is available to all goods classified under heading 8471 of the First Schedule to the Customs Tariff Act, 1974, without examining the appropriateness of the tariff item, it is held that the duty liability discharged by the appellant suffices for the purpose of levy. Appeal allowed - decided in favor of appellant. Issues:Appropriate classification of 'interactive intelligent panel (automatic data processing machine) model - cloudtouch' imported by the appellant.Analysis:The dispute in this appeal revolves around the appropriate classification of the imported goods, 'interactive intelligent panel (automatic data processing machine) model - cloudtouch,' by M/s Cloudwalker Streaming Technologies Pvt Ltd. The goods were imported from M/s Shenzhen Konika E-Display Co Ltd, China, and the classification issue arose concerning two bill of entry numbers. The original authority ordered assessment at a different rate of duty compared to the classification claimed by the appellant. The impugned proceedings upheld the re-classification, leading to this appeal.The appellant contended that the goods should be classified as 'automatic data processing machines' based on technical features and certification by the Bureau of Indian Standards (BIS). They highlighted a previous Tribunal decision regarding a similar classification issue. On the other hand, the Authorized Representative argued that the classification approved in the impugned order aligns with the Explanatory Notes of the Harmonized System of Nomenclature (HSN) and excludes machines operating only on fixed programs from coverage under a specific heading.The crux of the classification issue lies in the two rival descriptions provided: 'automatic data processing machines' and 'monitors' not primarily used in automatic data processing systems. The Tribunal emphasized the importance of correctly identifying the goods for classification purposes and the burden of proof on the Revenue to establish the appropriateness of the proposed classification before substituting the importer's claim.The Tribunal ultimately found that the goods in question, despite sharing some characteristics with monitors, contain a central processing unit and operate on software requiring an input device. Therefore, they cannot be solely categorized as projectors or monitors, rendering the re-classification inconsistent with the General Rules for Interpretation of the Import Tariff. Additionally, the availability of exemption notification for goods classified under a specific heading supported the appellant's position. Consequently, the impugned order was set aside, and the appeal was allowed.In conclusion, the judgment delves into the technical and legal intricacies of classifying imported goods, emphasizing the importance of accurate identification and the burden of proof on customs authorities in challenging an importer's classification claim. The decision provides a detailed analysis of the competing arguments and legal principles governing classification disputes, ultimately resulting in the setting aside of the re-classification and allowing the appeal.