TaxTMI 
TaxTMI 
2005 (7) TMI 386
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....A No. 125/2002, dated 18-12-2002. The issue in both the appeals are common. The question to be decided is correct classification of "Kernel" imported by parties. The parties claim classification of the product under Chapter sub heading 8473.30 of the Customs Tariff as parts and accessories of goods falling under CH 84.71. But, the Revenue holds that the correct classification would be under 8471.91 as a "Digital Processing Unit". 2. The kernel consists of a power supply unit, motherboard and other connectors housed inside a metal box. In order to make it a full-fledged computer other items like RAM (Random Access Memory), Floppy disk drive (FDD) or other storage units (Hard Disk Drive) are required. There is value addition to the ex....
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....evenue. 4. The learned Advocates adduced the following arguments; (i) The Commissioner based his conclusion on the following basis : (a) Section Note 4 to Section XVI of the Customs Tariff; (b) The test of essential character contained in Rule 2(a) of HSN Explanatory Notes; (c) The opinion dated 6-12-1994 given by the Joint Director, STPI; (d) The statements of the officials of the appellants; (e) The dictionary meanings of Central Processing Unit and Mother Board. (ii) The Advocate explained that each of the conclusions reached by the....
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....; According to departmental circular No. 528/132/98-Cus (TU), dated 15-10-98, computer kernels are classifiable under 8473.30. Then the opinion of MAIT on the issue supports stand of the appellants. (vii) Classification of Populated PCBs (memory modules), Floppy Disk Drives, mouse and key board; software and printed matter imported vide Bill of Entry No. 1163 dated 24-10-1994 as part and parcel of the kernels/system boxes on the ground that they came along with the said kernels/system boxes, is prima facie illegal in as much as the revision in classification of these items is beyond the order of the Tribunal and in the light of the fact that the Revenue had not filed any appeal against the classification held by the Commissio....
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....; Packing box 5. Clamp screws, etc. The pedestal assembly basically is an electronic assembly which is used for connecting the input output devices and peripherals. The sub-assembly is to be used for assembling computer system VAX 5500. Therefore, basically it consist of three electronic assemblies, namely, motherboard, power supply and pedestal assembly. There is no input and output device assembly built in or attached to the above-mentioned three assemblies and the CPU motherboard does not have memory board. It is a socket for adding memory modules. Heading 84.71 of CTA provides for digital automatic processing machines/digital processing units/input-output units and storage units. ....
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....ernels - computer inner and outer shell consisting of motherboard without C.P.U., base memory, power supply, floppy disk drive, all assembled in the Housing and computer body outer shell and inner shell without any other item. The point of dispute was that whether the assembly would be given benefit of notification No. 23/98-Cus. Sl. No. 188, when it contains populated P.C.Bs and the notification excluded populated PCBs. 2. The issue had previously been discussed at Point No. 2 in the conference of Commissioners of Customs, held at Chennai in December, 1997, which inter alia decided that, "computer inner and outer cabinets consisting of mother board, base memory, power supply unit, floppy disc drive, all assembled in the housing are....
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....been done in the original order of the Commissioner dated 25-6-1997 as indicated below : S. No. Description of Goods Assessable Value in Rs. Duty Paid @ 89.75% in Rs. Duty Payable on merit in Rs. Differential duty payable in Rs. 1. Populate PCB 7,09,415/- 6,36,700/- 5,67,532/- 69,168/- 2. Software 1,79,938/- 1,61,404/- 1,16,960/- 44,534/- 3. Printed Matter 28,504/- 25,582/- Nil 25,582/-     Total 1,39,284/- 8. It is also seen that the duty liability has also been discharged on them. In view of the above, there is no need to include the value of the items to the value of the kernels. In other words,....