Photocomposing machine classification under Heading 84.42 supported customs exemption for newspaper use

A composite photocomposing machine whose automatic data processing element was only incidental to its principal photocomposing function was classified by reference to that specific function under Heading 84.42, not Heading 84.71, because Chapter Note 5 of Chapter 84 excludes machines performing a specific function and Chapter Note 4 of Section XVI requires classification of the machine as a whole. On that basis, the exemption under Notification No. 217/90-Cus. was also available, as the goods were treated as photocomposing machinery and the supporting newspaper-establishment certificate reinforced the entitlement. The Revenue's challenge therefore failed.

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Issues: (i) Whether the imported photocomposing machine was classifiable under Heading 84.42 or Heading 84.71. (ii) Whether the benefit of Notification No. 217/90-Cus. was available to the importer.

Issue (i): Whether the imported photocomposing machine was classifiable under Heading 84.42 or Heading 84.71.

Analysis: The machine was found to be a composite unit whose automatic data processing element was only incidental to its specific function of photocomposing. Chapter Note 5 of Chapter 84 excludes from Heading 84.71 machines that incorporate or work in conjunction with an automatic data processing machine and perform a specific function, and Chapter Note 4 of Section XVI requires classification according to the clearly defined function performed by the machine as a whole. Since no other independent function was shown, the machine had to be classified according to its principal function.

Conclusion: The correct classification was under Heading 84.42 and not Heading 84.71, in favour of the assessee.

Issue (ii): Whether the benefit of Notification No. 217/90-Cus. was available to the importer.

Analysis: The notification benefit depended on the imported goods being treated as a photocomposing machine. Once the goods were held to be a photocomposing machine, and the relevant certificate from the Registrar of Newspapers supported the use of the equipment for the newspaper establishment, the basis for denying the exemption disappeared. The earlier notification issue was therefore linked to the classification finding.

Conclusion: The benefit of Notification No. 217/90-Cus. was rightly extended to the importer, in favour of the assessee.

Final Conclusion: The imported goods were held to be photocomposing machinery classifiable under Heading 84.42, and the exemption benefit under Notification No. 217/90-Cus. was upheld, resulting in dismissal of the Revenue's challenge.

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