TaxTMI 
TaxTMI 
TaxTMI 
2024 (4) TMI 179
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....sensus on its fitment and, even more so, in the contrasting approach of quasi-judicial decision making within the tax administration too. Doubtlessly, they have all taken pains to justify and are full of virtue in defending their respective positions on the issue. And it is all about MIKO II not only being no different from MIKO I - a toy - as asserted by customs authorities but also not comparable to the more advanced MIKO III which conforms to 'automatic data processing (ADP) machines and units thereof; magnetic or optical readers, machines for transcribing data on to data media in coded form and machines for processing data, not elsewhere specified or included' corresponding to heading 8471 of First Schedule to Customs Tariff Act, 1975, as claimed by the appellant owing to which heading 9503 of First Schedule to Customs Tariff Act, 1975 was held as appropriate by the customs administration. And it is controversial only owing to '8471 All goods' being afforded exemption from basic customs duty (BCD) in notification no. 24/2005-Cus dated 1st March 2005 (at serial no. 8). 2. The appellant is the organism created by, and the impugned article the brainchild of, three you....
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....der-in-original no. CG-GSS/37/2022-23 Adj (I), ACC dated 30th March 2023] of Commissioner of Customs (Import), Air Cargo Complex (ACC), Mumbai which is under challenge before us. As the goods had been cleared on 'self-assessment' and subject to 'post clearance audit', wide-ranging scrutiny enabled reference to earlier imports from the same source and, in particular, to bill of entry no. 4437266/16.12.2017 which declared it to be 'plastic toys with motor' corresponding to tariff item 9503 0030 of First Schedule to Customs Tariff Act, 1975 that, upon loading of software, would become functional. Furthermore, customs authorities took note of the description adopted in the impugned bills as being different from that in earlier consignments even as the description in the airway bills and shipping marks, viz., Emotix Miko', remained unchanged to conclude that the same product was being re-classified to take advantage of lower rate of duty. In accordance with procedure, consultative letter granting opportunity to restore good standing by deposit of differential duty was issued on 9th December 2019 but was resisted with definitive assertions to the contrary leading to 'pre notice consultat....
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....y upon the Revenue. If the Department intends to classify the goods under a particular heading or sub-heading different from that claimed by the assessee, the Department has to adduce proper evidence and discharge the burden of proof. In the present case the said burden has not been discharged at all by the Revenue......' in HPL Chemicals Ltd v. Commissioner of Central Excise, Chandigarh [2006 (197) ELT 324 (SC)]. It befalls us to subject the findings in the impugned order to the test supra. 6. We have heard Learned Counsel who contended, on behalf of appellant, that the goods are akin to the next version of the product which is far removed from the description corresponding to that favoured by the adjudicating authority. Based on this, he submitted that the Central Government had had a fresh look at the product and that, consequent to recommendation of Principal Scientific Advisor, the Ministry of Electronics and Information Technology [MeitY) and Bureau of Indian Standards had granted approval for registration as 'automatic data processing (ADP) machines', and not just for MIKO III but for MIKO II too, which traces its origins to communication initiated by Chief Commissioner o....
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....ectronics and Information Technology (MeitY) as well as the technical literature furnished, it could not be held that the goods would fit within 'automatic data processing (ADP) machines' and, relying on the description of the goods in the trade channels as 'electronic toy' intended for children between the ages of 5 and 10, it was contended that, in effect and notwithstanding its redeeming features, it continued to entertain and educate in the same manner that any toy would. He pointed out that, in imports effected in other countries, these are declared as 'toys' and by resort to heading 9503 in the tariff of those countries and that the supplier is also nothing but a toy manufacturer. He argued that, even if both tariff items are found to be equally applicable, the latter of the two would prevail in terms of rule 3 of General Rules for Interpretation of the Import Tariff in Customs Tariff Act, 1975. 8. The classification adopted in the impugned order has determined the goods to be 'other toys' made of plastic even though the description 'tricycles, scooters, pedal cars and similar wheeled toys; dolls' carriages; dolls; other toys; reduced size ("scale") models and similar recr....
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....not conform to such effect notwithstanding which, and in the absence of any standard of measure of 'toy', its appeal, or lack thereof, is an uncanny resemblance to that object of childhood fantasy which may have persuaded the adjudicating authority that re-classification was warranted. It also does not meet with legislative intent as use by a particular age group does not suffice for it to be 'toy' and it is certainly not in keeping with sensitivity towards needs of children to proceed in the belief that anything that persons of that age may find attractive are 'toys' and nothing more. 11. Tax policy of the government features exemption from basic customs duty that is not available to the goods conforming to description corresponding to the heading within which the adjudicating authority has placed the impugned goods. It is on record that the imported goods consists of components that do not, by a long stretch, find fitment within products of chapter 95 of First Schedule to Customs Tariff Act, 1975. There is no finding in the impugned order that the composition of the impugned goods is not a combination of a central processing unit and units for input and output. We are informed, ....
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.... cause for declaration of another tariff item for assessment would inevitably lead to scrutiny of the departure from the earlier version. The adjudicating authority did take note of '19.3...... * Miko is a robotic plastic toy with motor and has a small display of 2.8 inches only. It is battery operated. * To make this product functional, software is loaded either by the Importer or by the Manufacturer/ supplier. It is an app-enabled Robotic instrument which entertains both as a toy as well as a learning tool. It entertains and teaches children of age group 5 to 10 years. * It is pre-loaded with over 1000 educational topics, news updates and education game, The parent can download an application onto a Bluetooth Smartphone or tablet that will connect to and communicate with the Miko. * It can last for multiple hours on a single charge. Inside the said toy, there are wheels, motors, sensors, light sensors LEDs and a USB charging port. There are sensors to interact with kids. Miko uses all these devices to make fun interactive play experiences to keep children and wanting to play and learn at the same time. * In addition to the educational component, the 'Miko'....
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....S. Court held that PXI Controller which was a computer based instrumentation product and capable of being controlled by a Personal Computer/Laptop but is not a PC/laptop - principal function of controllers is executing control algorithms for real-time monitoring and control of devices controller performs functions in addition to data processing - what is imported is a system-containing an ADPM and if the contention of the importer herein is accepted, it would mean that every machine that contains an element of ADP would be classifiable as an ADP machine under Chapter 84 which would completely obliterate the specific function test and the concept of functional unit. Hon'ble Court upheld the classification of the department and held that goods were rightly classified under Chapter 90. The same principle applies to this case. is a finding without a foundation inasmuch as the adjudicating authority has isolated a function in pursuit of a principle that is intended to identify tariff item most appropriate for composite machines without justifying its utility for the impugned goods. Moreover, that identified function is not a description that fits in the proposed heading either. Fu....