Exemption for cellular phones cannot be narrowed by circular where classification evidence supports treatment of the imported model as a cellular phone.

A Board circular cannot narrow an exemption notification by adding a condition, such as requiring cellular phones to be hand held, when that limitation is absent from the tariff entry and notification. Classification turned on the evidence of the goods' features and use, and the burden rested on the Department to show that the imported model fell outside the exempted cellular-phone entry and within the residuary category. On the record, the imported LSP 340 was treated as a cellular phone and entitled to exemption. The valuation issue was remitted for reconsideration.

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Issues: Whether LSP 340 imported goods were covered by the exemption for cellular phones under the relevant tariff entry and notification.

Analysis: The relevant tariff entry and the exemption notification used the expression covering cellular phones, and the Board circular could not add a limitation that the phones must be hand held. The question whether the goods answered the description of cellular phones was one of classification and evidence, and the burden lay on the Department to establish that the goods fell only in the residuary entry. The record contained departmental material indicating that the model operated on cellular technology, and there was no basis to confine the benefit to hand held phones merely because of size or range.

Conclusion: The imported LSP 340 was entitled to the benefit of the exemption as a cellular phone, and the contrary view was set aside.

Final Conclusion: The appeals were disposed of with the exemption issue decided in favour of the importer, while the valuation matter was sent back for reconsideration.

Ratio Decidendi: A board circular cannot narrow an exemption notification by adding a condition not found in the notification, and where classification turns on evidence, the revenue must prove that the goods fall outside the exempted entry and within the residuary entry.

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