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2022 (11) TMI 1421
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....nts on application of advance ruling have been received from the concerned Principal Commissioner/Commissioner, Air Cargo, Chennai, Airport and Air Cargo Complex, Bengaluru and Air Cargo Complex, Sahar, Mumbai. 2.2 As per the application for advance ruling, the nature of activity is proposed import of "three different models of Laser jet printer i.e., HP Laser jet 108a (HP 108, in short), HP Laser jet MFP 136a (HP 136, in short) and HP Laser jet MFP 438nda (HP 438, in short)" and advance ruling has been sought on classification of the goods under Sub-heading 8443 32 40 and 8443 31 00 of the Customs Tariff Act, 1975. Further, advance ruling has also been sought on eligibility to claim benefit of exemption under SI. No. 2 of Notification No. 24/2005-Cus dated 1-3-2005. 3.1 It is further stated in the application that (A) HP 108 is a small and compact printer which works on laser technology; it has an inbuilt memory of 64MB and works on a processor of 400 MHz; it comes with a LED display and can be connected to any computer through a high-speed USB 2.0 port; (B) HP 136 is a multi-function printer which can be used for printing, copying as well as sc....
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.... b. Whether the HP 108 proposed to be imported without formatter board is rightly classifiable under CTI 8443 32 40 of the Customs Tariff? c. If the answer to the above questions (a) and (b) is in the negative, then, what is the appropriate classification of subject goods under the Customs Tariff? d. If the answer to question (a) is in positive, whether the applicant is eligible to claim benefit of exemption under SI. No. 2 of Notification No. 24/2005- Cus dated 1-3-2005? 3.4 The applicant also states that classification of the goods mentioned in the First Schedule of the Customs Tariff is governed by the General Rules for Interpretation (GRI, in short); the said rules for interpretation have been adopted from the General Rules for the Interpretation of the Harmonized System; as per Rule 1 of the GRI, goods under consideration should be classified in accordance with the 'terms' of the heading or the relevant Section or Chapter Notes; it further states that in the event the goods cannot be classified solely on the basis of said Rule 1, and if the headings and legal notes do not otherwise require, the remaining Rules 2 to 6 may then be applied in....
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....ing rule 2(a) of GRI; the relevant portion of the judgment states, "11. Coming to the nature of the goods that are imported, although they were declared as LEDs, on examination, they were found to be not individual LEDs but strands of 50 LEDs each. Such strands of LEDs are used for decoration, etc. but one needs to attach the adapters and connectors to the strings of LEDs. There were no adapters in the consignment and therefore, they were incomplete. Learned adjudicating authority has correctly applied Rule 2(a) to conclude that they were classifiable as Lighting sets of a kind used for Christmas trees 94053000. The classification of the goods by the Commissioner (Appeals) needs to be set aside and the classification by the original authority needs to be restored and we do so."; reliance is also placed on the decision of Hon'ble Tribunal, Mumbai in the case of Maharaja Whiteline Industries Ltd v. Commissioner of Customs, 2019-TIOL-1797-CESTAT-MUM; in this case, the imported goods were examined, and it was found that the goods were essentially six sets of Injection Moulding Machine without clamping units; the goods had been imported in semi-knocked down condition; the Hon'bl....
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....dity Description and Coding System' and developed by the World Customs Organization; it comprises of various commodity groups, each identified by a six-digit code, arranged in a legal and logical structure and is supported by well-defined rules to achieve uniform classification; the HSN Explanatory Notes are not merely of persuasive value; instead, they are entitled to greater consideration and this proposition has been upheld in a catena of decisions: • Collector of Central Excise, Shillong v. Wood Craft Products Ltd. 1995 (77) E.L.T. 23 (S.C.); • Collector of Customs, Bombay v. Business Forms Ltd. 2002 (142) E.L.T. 18 (S.C.); • O.K. Play (India) v. Commissioner of Central Excise AIR 2005 SC 1023, 2005 (180) E.L.T. 300 (S.C.)/2005 taxmann.com 642 (SC) [3-judge bench]; • Commissioner of Customs v. Gujarat Perstorp Electronics Ltd., [2005] 7 SCC 118 2005 (186) E.L.T. 532 (S.C.)/2005 taxmann.com 1320 (SC) [3-judge bench]; • Commissioner of Central Excise v. Phil. Corpn. Ltd. 2008 (223) E.L.T. 9 (S.C.)/2008 taxmann.com 783(SC) and • Hindustan Unilever v. Commissioner of Central Excise, 2008 (228) E.L.T. ....
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....39;other printers' under CTH 8443 of the Customs Tariff; the scope of the printers which are covered as 'other printers' under CTH 8443 of the Customs Tariff has been discussed under HSN Explanatory Notes to CTH 8443; the relevant portion of the HSN Explanatory Notes states, "(II) OTHER PRINTERS, COPYING MACHINES AND FACSIMILE MACHINES, WHETHER OR NOT COMBINED, this group covers: (A) Printers, this group includes apparatus for the printing of text, characters or images on print media, other than those that are described in Part (I) above., these apparatus accept data from various sources (e.g., automatic data processing machines, flatbed desktop scanners, networks); most incorporate memory to store that data, the products of this heading may create the characters or images by means such as laser, ink-jet, dot matrix or thermal print processes..."; it can be seen from the above extracted portion of HSN Explanatory Notes, that the printers having inbuilt memory, and which are used for printing of text, characters or images by means of laser technology are covered under the category of 'other printers' under CTH 8443 of the Customs Tariff; in the present case also,....
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....t of the aforementioned submissions, the applicant is of understanding that HP 108, HP 136 and HP 438 are Laser jet printers having the essential character of a complete printer in the 'as imported condition', even in the absence of formatter board; therefore, they consider these goods to be appropriately classifiable under Sub-headings 8443 32 40, 8443 3100 and 8443 3100, respectively; furthermore, exemption from payment of Basic Customs Duty under Sl. No. 2 of Notification No. 24/2005-Cus on import of HP 136 and HP 438, is also applicable. 5.1 I have also gone through the comments of concerned Principal Commissioner/Commissioner of Customs. While commenting on the application for advance ruling, the concerned Principal Commissioner, Air Cargo, Chennai is of the view that item HP 136 and HP 438 has essential character of Multi-Function Printer without formatter board also and hence as per rule 2(a) of GRI, the said goods are classifiable under sub-heading 84433100. Whereas, the item HP 108 without formatter board also has the essential character of a Laser Jet Printer; hence as per rule 2(a) of GRI, said goods are classifiable under sub-heading 84433240. It is further s....
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....for the applicant wherein referring to the comments received from the concerned Commissioner, Mumbai, it is stated inter alia that the comments provided by them regarding classification and exemption vide Notification to the subject goods are legally incorrect and deserves to be rejected; the formatter board is only a printed circuit board which is used to relay data from a computer to the printer's engine; apart from formatter board and firmware, the printer has all other components like engine, tone cartridge top level, etc; therefore, it is submitted that the printers proposed to be imported by the applicant have the essential character of complete printers; consequently, they will be classified as complete printers by applying rule 2(a) of GRI; reliance in this regard is placed on HSN Explanatory Notes to Chapter 87 of the Customs Tariff which talks about classification of incomplete vehicles; it is submitted that motor vehicles cannot function without its engine, however, the HSN Explanatory Notes still says that such motor vehicles will be classified as complete motor vehicle by applying rule 2 (a) of GRI. It is also submitted that the subject goods are not parts of copyi....
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....pplying rule 2(a) of GRI. 9.3 I also note that HSN Explanatory Notes to section XVI states, ""Throughout the Section any reference to a machine or apparatus covers not only the complete machine, but also an incomplete machine (i.e., an assembly of parts so far advanced that it already has the main essential features of the complete machine), ".thus a machine lacking only a flywheel, a bedplate, calender rolls, tool holders, etc., is classified in the same heading as the machine, and not in any separate heading provided for parts; similarly a machine or apparatus normally incorporating an electric motor (e.g., electro-mechanical hand tools of heading 84.67) is classified in the same heading as the corresponding complete machine even if presented without that motor". Thus applicant's inference from these Explanatory Notes that if a machine (which incorporates a motor) is imported without the motor, it can still be classified as complete machine, merits favourable consideration 10.1 In light of the foregoing, it seems that in order to issue ruling in the instant case, the moot question is as to whether or not, the items, i.e printers in question, in absence of formatter boar....