2026 (2) TMI 244 - AT - Customs

Classification of computer monitors and applicable IGST rate; appellate direction to reassess under Customs Act and set aside 28% levy

Classification of computer monitors hinged on distinguishing monitors for ADP machines from TV/video monitors and on application of the residuary IGST ... Classification of goods - computer monitors - integrated tax rate - distinction between monitors for ADP machines and TV/video monitors - CBIC circular guidance for classification - residuary entry in IGST rate notification - self-assessment and scope of revision - discharge under protest and assessment u/s 17(5) of Customs Act, 1962 - jurisdiction to determine IGST rate - HELD THAT:- According to the appellant, the impugned goods are ‘computers’ of the appropriate size and was not amenable to the assigned description in schedule IV of the notification. It was further contended that, while designed for use with computers and capable of being connected to computers, that these were not solely or principally so precluded taking of the ambit of serial no. in the rate notification, as declared. In any case, had the appellant discharged the liability at 18% for integrated tax, it was not open to customs authorities to revise it to 28% as set out in re Ortho Clinical Diagnostics India Pvt Ltd. [2022 (9) TMI 1109 - CESTAT MUMBAI] Consequently, we set aside the orders rejecting the applications for amending the respective bills of entry and restore the assessments to the ‘proper officer’ in section 17(5) of Customs Act, 1962 to determine the consequential duty liability. In view of this direction, the impugned orders sustaining the assessment at 28% for integrated tax are set aside. Issues: (i) Whether the imported monitors (M80281FQ AW MVCD-1619 Barco Monitor for MRI) are classifiable as computer monitors under heading 8528 such that IGST at 18% (serial no. 384/383C of Notification No.1/2017-Integrated Tax (Rate)) applies instead of 28% charged under serial no.154; (ii) Whether the orders rejecting amendment applications and sustaining assessment at 28% IGST should be set aside and assessments restored to the proper officer under section 17(5) of the Customs Act, 1962 for consequential determination.Issue (i): Classification and applicable IGST rate for the imported monitors.Analysis: The Tribunal applied TARiff classification principles including GIR 1 and HS explanatory notes to distinguish monitors capable of connecting to and designed for use with ADP machines from other monitors; relied on technical criteria (connectors, absence of TV tuner, viewable size, display pitch, ergonomic and connectivity features) and CBIC guidance (Circular No.33/2007) as authoritative field guidance. The Tribunal found the goods were 19 inch LCD monitors, met the ADP-monitor technical specifications, and fell within heading 8528; notification serial entries for IGST are keyed to the heading (8528) and size/technical capability, leading to 18% rate for monitors not exceeding 32 inches or computer monitors per Notification No.1/2017.Conclusion: The imported monitors are classifiable as computer monitors under heading 8528 and attract IGST at 18% (favouring the assessee).Issue (ii): Validity of impugned orders rejecting amendment requests and sustaining assessment at 28% and appropriate remedial direction.Analysis: The Tribunal held that the adjudicating authority failed to apply proper classification analysis, erred in treating the notification entry as limited to a specific tariff item (8528 5200) rather than the heading (8528), and did not discharge the burden of proof for re-classification; reliance on established authorities on burden and on CBIC circulars was invoked. Given absence of prejudice to revenue and correctness of declared classification, the Tribunal found the rejection of amendment and revision to 28% to be unsustainable.Conclusion: The orders rejecting amendment and sustaining assessment at 28% are set aside; the assessments are restored to the proper officer under section 17(5) of the Customs Act, 1962 for consequential determination (outcome favourable to the assessee).Final Conclusion: The Tribunal allowed the appeals to the extent of quashing the impugned orders on IGST rate and classification, directing reconsideration by the proper officer consistent with the Tribunal's findings that the monitors qualify as computer monitors attracting IGST at 18%.Ratio Decidendi: Monitors that satisfy the technical criteria of being capable of directly connecting to and designed for use with ADP machines fall under heading 8528 and, if of display size not exceeding 32 inches, attract IGST at the 18% rate specified in the notifications; reclassification by revenue requires discharge of the burden of proof and cannot substitute a tariff item beyond the notification's heading-based entries.