2025 (2) TMI 256

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....') assailing the Order-in-Appeal No. 192/2016 (CXA-II) dated 31.05.2016 passed by the Commissioner of Central Excise (Appeals-II), Nungambakkam, Chennai who have allowed the appeal of the Revenue classifying 'Add-on Cards' under CTH 847300 of Central Excise Tariff Act, 1985 and also imposed a penalty of Rs.10,000/- under Rule 173Q of the Central Excise Rules, 1944. 2.1 Briefly stated the facts are that the Appellant is a Manufacturer of Computers falling under Chapter sub-heading 8471.00 of the Central Excise Tariff Act, 1985 and classified the 'Add-on Cards' under Chapter sub-heading 8471.00 attracting Central Excise Duty @ 15%. However, the Revenue was of the view that these products viz., 'Add-on Card' would be correctly classifiable ....

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.... directing therein to decide the case based on the decision rendered by the Apex Court in the above case. 2.3 Considering the contentions of the Department, the Lower Appellate Authority vide Order-in-Appeal dated 31.05.2016 had held that Add-on Cards are classifiable under Chapter Heading 8473 of the Central Excise Tariff Act relying on the decision rendered by the Tribunal Mumbai in the case of Commissioner of Central Excise, Mumbai-II Vs. Virtual Computers Pvt. Ltd. [2013 (292) ELT 478 (Tri.-Mum.)]. 3. During the hearing before the Tribunal, the Ld. Advocate M.N. Bharathi has admitted that the issue of classification of Add-on Cards has been decided against the Appellant in view of the decisions in the cases of Vintron Electronics ....

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.... has appreciated the fact that the Add-on Cards are connectable to the CPU either directly or indirectly or through one or more other units; specifically designed as part of such a system; and able to accept or deliver data in a form (code or signal) which could be used by the system. ii. Therefore, the opinion of the ET&T confirms the classifications of the Add-on Cards only under Chapter Heading 84.71 and not under Chapter 84.73 and the Chapter Note 5(c) to Chapter 84 affirms that even units presented separately are to be classified under Chapter Heading 84.71 only. However, on review of this order when an appeal was filed before the Lower Adjudicating Authority, he had reversed the decision allowing the appeal of the Departme....

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....ereof; magnetic or optical readers, machines for transcribing data on to data media in coded form and machines for processing such data, not elsewhere specified or included. Heading 8473 covers Parts and accessories (other than covers, carrying cases and the like) suitable for use solely or principally with machines of heading Nos. 84.69 to 84.72 of the Tariff. 6. The add-on card and motherboard cannot be considered as automatic data processing machines. The same are parts and accessories suitable for use with the machine falling under Heading 84.71 of the Tariff. In view of the above, as the goods in question are parts and accessories of the data processing machine falling under Heading 84.71 of the Tariff, therefore being parts a....