TaxTMI 
TaxTMI 
2008 (1) TMI 283
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....efective medium from specific customers for undertaking the job of recovery of data. For effecting such recovery, the damaged/corrupted medium containing the data would be exported abroad, where data will be recovered and stored in a new medium. The data recovered and recorded on a new medium will be sent to India, along with the damaged medium from which the data was recovered. For rendering this service of recovering the data, the agency abroad will collect a service fee from the applicant. Normally, if the recovered data is less than 20GB in size, it will be sent in multiple digital video discs (DVDs) which will be provided by the foreign agency to the applicant free of charge. If the data is more than 20GB, the same will be provided on a hard disc drive (HDD) and the cost of such drive will be billed to the applicant. In column 12 of the application they have posed the following questions for pronouncement of a ruling by this Authority:- (a) "What will be the classification and rates of import duties under the relevant Customs Tariff for the data recovered and re-imported in different media." (b) "What will be the assessable value as per section 14 of Customs Act 1962 for....
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....r) has submitted his comments on the application vide his letters dated 16.8.07 and 14.9.07. The Commissioner states that imports of the damaged/corrupted DVDs and HDDs exported from India for the purpose of effecting recovery by an agency abroad, of the data contained therein, can be accepted to be a case of re-importation entitled to 'nil' rate of basic and additional customs duty against sr.no.3 Notification No.94/96-Cus. dated 16.12.96, so long as these can be identified to be the same as those exported. However, bringing into India of new DVDs and HDDs containing the recovered data has to be considered as fresh imports, not eligible for exemption as re-importation under Notification No.94/96-Cus., as in the process of retrieving the data, the media on which the data was originally contained 11as been changed He further states that the recorded DVDs and the HDDs are classifiable under 8523 40 80 and 8471 70 20 respectively, under the Customs as well as the Central excise Tariffs. The recorded DVDs and the HDDs attract 'nil' rate of basic customs duty as per sr. nos. 15(b) and 8 respectively of Notification No.24/2005-Cus. dated 1.3.05. The above media, i.e., DVDs and the HDDs, ....
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.... M/s Seagate, Singapore International Headquarters Private Limited is to partner with M/s. Accel Frontline to provide professional data recovery service in the Indian market. The news item goes on to state that Seagate software solution and recovery services employing patented technology will enable M/s Accel Frontline service engineers to recover data from media, regardless of size or forms that have undergone severe physical damage, liquid damage, fire damage, software corruption, systems sabotage and accidental file deletion. 9. Shri Sharma states that the applicant need to disclose their relationship with M/s Seagate to determine whether they should be deemed to be related for the purpose of Section 14 of the Customs Act, specially since the said news item reveals that Seagate and Accel Frontline will be partners. 10. In response to the issues raised by the JCDR Shri Sharma, the applicant vide a communication received on 2.11.07 has made the following submissions: - that the applicant and M/s Seagate are not related persons within the meaning of the Customs Valuation Rules 1988/2007; that Rule 2 of the Customs Valuation Rules 1988 defines 'related persons' and that the....
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....ion, as also the comments thereon submitted by the Commissioner and his representative. We agree with the classifications in the Customs and Central Excise Tariffs put forward by the Commissioner i.e.8523 40 80 for the recorded digital video discs and 8471 70 20 for the recorded hard disc drives. We also agree that the imports of the DVDs and HDDs containing the damaged data, exported for recovery of the data contained therein, are exempted from basic customs duty and additional duties of customs leviable under Section 3 of the Customs Tariff Act 1985, against sr. no. 3 of Notification No.94/96-Cus. dated 16.12.96, provided the fact of re-import of the same damaged data is established. We also agree that the imports of the hard disc drives and the recorded DVDs (not containing any sound or visual data) containing the recovered data, are fully exempted from basic customs duty under Notification No. 24/2005-Cus. Dated 1.3.05 from additional duty of customs leviable under section 3(1) of the Customs Tariff Act by virtue of Notification No.6/2006-CE dated 1.3.06. We further endorse the Commissioner's stand that no additional duty of customs on the imports of DVDs, containing the recove....
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....ade the following observations which are relevant :- "The value of an encyclopedia or a dictionary or a magazine is not only the value of the paper. The value of the paper is in fact negligible as compared to the value or price of an encyclopedia. Therefore, the intellectual input in such items greatly enhances the value of the paper and ink in the aforesaid examples. This means that the charge of a duty is on the final product, whether it be the encyclopedia or the engineering or architectural drawings or any manual." " " " " " " " " " "It is a M/s conception to contend that what is being taxed is intellectual input. What is being taxed under the Customs Act read with the Customs Tariff Act and the Customs Valuation Rules is not the input alone but goods whose value has been enhanced by the sa....
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....d then separately in terms of the medium on which it happens to be recorded. It is the nature of the data recorded, that imparts the identity to the goods and not the medium on which it is recorded. In the instant case, the data exported, albeit in a damaged condition, and the recovered data imported,' have to be considered as the same goods, provided the identity of the data exported and imported is established. The identity of this data does not change because of a change in the receptacle on which it is contained. The Commissioner's stand that the exported goods i.e. damaged data on DVDs/HDDs are different from the imported goods, viz. recovered data contained on new DVDs/HDDs, only because the medium on which the data has been recorded has been changed, cannot therefore be accepted. 19. Serial no.2 of Notification No.94/96-Cus.dated 16.12.96 provides exemption from duty on goods re-imported after repairs abroad. The term 'repair' has been defined in dictionaries as follows :- Concise Oxford English Dictionary: "restore (something damaged, worn or faulty) to a good condition." The New International Webster's Dictionary and Thesaurus: "to restore to sound on good conditi....