Functional classification for customs exemption: disc drives qualify as transcribing machines, but disc packs do not.

Exemption under Notification No. 40/82-Cus. depended on the actual function of the imported article. A disc drive was treated as eligible because it reads and writes magnetized data on disks and performs the essential task of transcribing data onto data media in coded form. A disc pack, by itself, was not treated as machinery capable of performing that transcribing function and therefore did not satisfy the notification. The operative principle is that exemption follows the function performed by the goods, and the benefit cannot be extended to an item that does not itself carry out the notified activity.

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Issues: (i) Whether imported disc drives were entitled to exemption under Notification No. 40/82-Cus. as machines for transcribing data onto data media in coded form; (ii) whether imported disc packs were entitled to the same exemption.

Issue (i): Whether imported disc drives were entitled to exemption under Notification No. 40/82-Cus. as machines for transcribing data onto data media in coded form.

Analysis: The exemption turned on the functional character of the goods. On the technical material, the disc drive wrote and read magnetized data on disk surfaces and performed the essential function of copying or reproducing data in another form. That activity satisfied the description of transcribing data onto data media in coded form. The earlier view taken in similar matters also supported the same interpretation.

Conclusion: Yes. Disc drives were held eligible for exemption under Notification No. 40/82-Cus.

Issue (ii): Whether imported disc packs were entitled to the same exemption.

Analysis: A disc pack, considered by itself, was not treated as a machine capable of transcribing data. Since the exemption was confined to machinery performing the relevant transcribing function, the disc pack did not satisfy the notification requirement.

Conclusion: No. Disc packs were held not eligible for exemption under Notification No. 40/82-Cus.

Final Conclusion: The order was interfered with only to the extent that disc drives were denied exemption, while the denial of exemption to disc packs was maintained.

Ratio Decidendi: Eligibility under an exemption notification depends on the actual function performed by the imported article, and a goods-specific classification benefit cannot be extended to an item that does not itself perform the notified function.

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