TaxTMI 
TaxTMI 
TaxTMI 
2025 (5) TMI 1767
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....ng them under Custom Tariff Sub-Heading [CTSH] 844332 at NIL rate of duty. However, the Department was of the opinion that the said printers were classifiable under CTSH 844339 wherein the applicable rate of Customs duty was @ 7.5%. Searches were conducted by the DRI Officers at the factory premises of the appellant, where one more printer, in addition to the subject two printers, was found installed. The said printers had been imported vide Bill of Entry No. 2409364 dated 08.12.2010 and the appellant had classified the same under Customs Tariff Item [CTI] 8443 39 90. Thereafter, statements of Shri Gyan Prakash Nirmal, then Vice President in Appellant company and Shri Lalit Chander Sharma were recorded. On completion of the investigations, the instant show cause notice was issued demanding differential Customs Duty of Rs. 50,36,786/- in respect of printers imported vide Bills of Entry Nos. 3967742 dated 02.07.2011 and 4414865 dated 20.08.2011 under Section 28(4) of the Customs Act, 1962, along with applicable interest under Section 28 AA of the Customs Act, 1962. Further, penalty under Section 114A and 112 (a) was also proposed. The show cause notice was adjudicated vide the impugn....
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.... also been defined in the sub-heading notes: (i) Printers covered by heading 8443 31 are printers which are capable of carrying out more than one function of printing, copying, facsimile transmission AND must be capable of connecting to a ADP machine or to a network. (ii) Printers covered by heading 8443 32 are printers which do not carry out any other function other than printing BUT must be capable of connecting to an ADP machine or to a network. These are further classified in to various headings depending upon different technology.8443 32 90 covers other printers that are connectable to ADP machine or to a network, which use technology other than those specified under tariff items from 8443 32 10 to 8443 32 60. (iii) Printers covered by heading 8443 39 are printers other than those which are connectable to an ADP machine or to a network." 3.5. Learned counsel stated that the term "connectable to an ADP machine or to a network" for the purpose of subheadings 8443.31 and 8443.32 has been explained in the Explanatory Notes which is extracted in the aforesaid circular, which reads as follows: "The criterion "capable of connecting to an automatic data processing machine....
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....elied upon earlier decision in case of Monotech Systems Limited vs. Commissioner- 2020 (373) ELT 718 (Tribunal) wherein the Tribunal after considering all the relevant Tariff Entries, Circular No. 11/2008 and HSN Explanatory Notes, had held that the subject printers were classifiable under CTSH 844332 in view of the fact of availability of components for connecting said printer to a network. The Tribunal in case of Aztec Fluids And Machinery Pvt. Ltd. vs. Commissioner of Customs, Ahmedabad- (2024)14 Centax 174(Tri-Ahmd) has followed the said two decisions. In view of aforesaid decisions of the Tribunal, learned counsel submitted that the subject printers in instant case are appropriately classifiable under CTSH 844332 attracting nil rate of duty at the relevant point of time. 3.8. Learned Counsel further stated that for classification of an item under a particular heading, the terms of that heading should first be applied and then the Section Notes & Chapter Notes and thereafter, Rules of Interpretation and other provisions should be looked into. In the instant case, the term pertaining to CTSH 844332, is connectability of printers to an ADP machine or to a network wh....
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....the foundational distinction between 'Inkjet Printers' under CTSH 8443 32 and 'Inkjet Printing Machines' under CTSH 8443 39 lies in their functional dependence on an ADP machine for executing print jobs. We note further the product brochures and technical manuals indicate that the impugned machines were expressly marketed as digital inkjet printing systems with in-built processing capability, operating systems, control interfaces, and independent command execution modules. The catalogues and brochures uniformly use the terminology 'machine' and 'system' in describing the impugned goods, which aligns with their industrial-scale printing functionality. It is relevant to extract here the technical specification section of the 'Creta Compat 700 x 4' and 'Durst Gamma 75 HDS 2-5 C' manuals which state as follows: "Integrated Windows-based computer control platform; Touchscreen user interface; In-built design processing and print file generation software; No external ADP machine required for operation; Optional USB port or LAN interface available for data transfer." 7.1 The above description clearly confirms that the machines are capabl....
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....ng an integrated PC, touchscreen interface, proprietary print control software, automated tile feed mechanisms, and a self-contained ink management system. It provides optional interfaces for design import via USB storage devices but expressly notes that operational commands are managed internally. It further states that no external computer is required for print job management once the design is transferred. The machine incorporates software capable of converting design files to printable formats, managing print heads, and aligning substrates, all functions traditionally performed by an external ADP system in standard printers. In this context, we take note of the fact that such machines are primarily intended for industrial application in specialized sectors such as tile manufacturing, glass decoration, and large-format industrial signage, and not for office or commercial document printing as envisaged for devices under CTSH 8443 32. The product literature repeatedly uses the terms 'system' and 'machine' rather than 'printer', further reinforcing their industrial character. 10. Our view is further fortified by the General Rules for Interpretation of the ....
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....rs' under CTI 8443 3250. Even if, there remained any ambiguity in classification between the two headings, Rule 3(c) enjoins that classification be made under the heading which occurs last in numerical order among those which equally merit consideration. Thus, by both application of specificity and sequential preference, the impugned goods correctly fall under CTI 8443 3910. 11. At this juncture, we also take note of the fact that the appellant had, prior to these consignments, imported similar machines under Bill of Entry No. 2409364 dated 08.12.2010 and classified them under CTI 8443 3990 as 'Digital Printing Machine for Ceramic Industry'. We are of the opinion that this earlier classification under an eight-digit tariff heading covering 'Other' printing machinery is a tacit admission by the appellant of the character of the impugned goods as printing machinery, distinct from conventional ADP-connected printers. The appellant's subsequent attempt to classify functionally identical machines as 'Inkjet Printers' under CTI 8443 3250 was motivated in order to avail of the ITA exemption. 12. Further, in the decision in Aztec Fluids and Machinery Pvt....
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.... machines are industrial digital printing systems with in-built processing modules executing complex print jobs autonomously, thus precluding classification under CTSH 8443 32. 14. As regards the World Customs Organization (WCO) Classification Opinion cited by the learned counsel, we find that the same pertains to digital printers for office or commercial document printing, which are fundamentally dependent upon a controlling ADP machine. The impugned industrial machines, by contrast, are intended for large-scale industrial applications involving direct printing on non-paper substrates such as ceramic tiles, equipped with advanced automation and independent control systems, situating them outside the scope of the WCO opinion relied upon. 15. It must be appreciated that customs classification is not determined by commercial description alone but by the nature, functionality and technical characteristics of the goods as discernible from the Harmonized System of Nomenclature (HSN), tariff schedules and statutory interpretative rules. The mere usage of the term 'printer' in the invoice description or even product marketing material does not bind the customs authority if the functio....
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.... to evade payment of duty, which stands amply established on record. In this context, it is noteworthy that the adjudicating authority, in the impugned Order-in-Original, has categorically recorded that the earlier import made by the same appellant under Bill of Entry No. 2409364 dated 08.12.2010 was for a comparable machine, classified at that time under CTI 8443 3990 as a 'Digital Printing Machine for Ceramic Industry', with full payment of applicable customs duty @7.5%. This establishes the appellant's prior awareness of the true nature and appropriate classification of such machines. The sudden deviation in classification for subsequent imports of similar machinery under CTI 8443 3250 and 8443 3290 cannot be viewed as an inadvertent or bona fide misinterpretation of tariff provisions. Rather, it amounts to a conscious and calculated attempt to avoid payment of customs duty by resorting to misdeclaration and suppression of facts, warranting the invocation of the extended limitation under Section 28(4) of the Customs Act, 1962. 20. Having regard to the material on record, including the product literature, inspection reports, statements recorded, and the applicable i....