TaxTMI 
TaxTMI 
2023 (1) TMI 1522
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.... the question of classification and applicability of notification. The applicant has proposed to import Canon Camera Model No. DS126881(commercial name EOS R8) [subject goods, in short] as a complete product [i.e. camera body, lens (optional), battery and battery charger] and these are newer and more advanced version of the earlier Digital Interchangeable Lens cameras imported by the applicant; it has been conceptualized as standalone compact and lightweight full-size mirror-less camera. Thus, the subject goods have been designed technically and ergonomically to sit into line-up of their digital interchangeable lens camera models; the subject goods in addition to capturing still images is able to record video for more than 30 minutes in a single sequence, however, maximum video recording capability is subject to temperature inside the camera caused by shooting modes, connectivity and other usages and storage space available in the internal/external memory. As regards other features, it is also stated inter-alia that the subject goods have been designed by combining professional interchangeable lens camera with advanced capability of mirror-less camera; such cameras are intended to ....
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....ication, the relevant portion of CTH 8525 of Customs Tariff has been reproduced herein under: Heading/Sub-heading/Tariff Item Description of Goods Rate of Duty 8525 Transmission apparatus for radio-broadcasting or television, whether or not incorporation reception apparatus or sound recording or reproducing apparatus; Television Cameras, Digital Cameras and Video Camera Recorders - Television cameras, digital cameras and video camera recorders: 8525 81 00 -- High-Speed goods as specified in sub-heading Note 1 to this Chapter 20% 8525 82 20 -- Other, radiation-hardened or radiation-tolerant goods as specified in sub-heading Note 2 to this Chapter 20% 8525 83 00 -- Other, night vision goods as specified in sub-heading Note 3 to this Chapter 20% 8525 89 00 -- Other 20% 4.2 The applicant has further stated that with the introduction and implementation of HSN 2022, the specific tariff lines incorporating specific headings for 'Television cameras', 'Digital Cameras' and 'Video Camera Recorders' have been deleted; such tariff lines have been substituted for new tariff li....
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....cording to the applicant, subject goods are appropriately classifiable under Sub-heading 8525 89 00 of the Customs Tariff. 4.4 As regards eligibility to claim exemption under Notification No. 50/2017-Cus. (SI. No. 502), the applicant has stated that as per the Customs Tariff, the goods falling under the Sub-heading 8525 89 00 of the Customs Tariff are chargeable to BCD at the rate of 20% ad volerem; prior to the introduction of HSN 2022, they have been claiming exemption from payment of BCD under S. No. 502 of Notification No. 50/2017 for other models of cameras similar to the present camera; however, with the amendment in the Customs Tariff in view of the afore-stated exemption entries have also been amended; Notification No. 50/2017-Cus. provides for exemption from payment of BCD if the imported goods fulfill the conditions mentioned in Column (2) and (3) of the Customs Tariff; in this regard, S. No. 502 of Notification No. 50/2017-Cus. grants exemption to goods classifiable under Sub-heading 8525 89 00 of Customs Tariff which satisfy the condition of 'Digital Still Image Video Cameras other than Camera or Camera Module of cellular mobile phones'; in the present case, ....
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....all digital still image video camera classifiable under 85288900 irrespective of their video recording time. The applicant further states that similar to classification, Section and Chapter Notes also acts as guiding factor for claiming exemption benefit; Note 3 to Section XVI of Customs Tariff provides that unless otherwise required, the goods must be classified basis their principal function; relevant extract from Note 3 to Section XVI are as under: "3. Unless the context otherwise requires, composite machines consisting of two or more machines fitted together to form a whole and other machines designed for the purpose of performing two or more complementary or alternative functions are to be classified as if consisting only of that component or as being that machine which performs the principal function."; 4.6 Keeping the aforementioned in mind, the applicant submits that it used to classify earlier models in the erstwhile Customs Tariff under Sub-heading 8525 80 20 as 'digital camera' based on their predominant function to click-still images; however, the distinguishing factor between such cameras and the subject goods is that the earlier models were restric....
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....In the present case, the subject goods have bigger sensor size, low bit-rate and 24M megapixels. Additionally, there is no cooling fan present inside the subject goods. Therefore, keeping the aforesaid factor in mind, the subject goods have features more inclined towards the capturing still images. Functionalities: video cameras usually have some of the following features for better operation of movie recording capabilities which are usually not present in a 'Digital Still Image Video Camera'. Essentially, the subject goods are a trade-off of some of the following features in order to keep such cameras smaller and lighter than the video cameras. The features have been discussed herein below: - (i) Higher reliable type of HDMI/USB. The video cameras usually have higher and more reliable type of HDMI port and USB port when compared to 'Digital Still Image Video Camera'. These terminals ensure that there is no loss of recorded video and audio during transmission of data from cameras to other output device such as display, or real time storage of data in other output device. (ii) Cooling Fan. As also discussed herein above, video cameras are g....
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....lassification and exemption benefit; keeping the aforesaid dictum in mind and the fact that the subject goods have the ability to capture still images and record videos fulfil the definition of 'Digital Still Image Video Camera'; therefore, the applicant is of considered view that the subject goods are covered within the scope of Column (3) of S.No. 502 of Notification No. 50/2017, hence, the applicant believes that it is eligible to claim exemption under S.No. 502 of Notification No. 50/2017 against the import of subject goods. 4.10 The applicant has also stated that the device is not launched commercially in India and requested to ensure that the confidentiality thereof is strictly maintained. 4.11 The concerned Principal Commissioner has commented inter-alia that details of various features of the Canon Camera Model No. DS 126881 given by the applicant have been examined and it can be seen that the subject goods are regular consumer goods for use in standard environments and use-cases, thus, the subject goods are not classifiable under Sub-heading 85258100, 85258200 and 85258300 of the Customs Tariff; therefore, on application of rule 6 read with rule 1 of GRI, the....
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....anon camera, the models of Canon camera in question merit same classification and applicability of exemption notification. The advocate also referred to para 6 of CBIC Circular No. 32/2007-Cus. dated 10.09.2007 wherein it is stated inter-alia that the term, 'digital still image video camera' also include digital cameras that take moving images for limited period of time although they are primarily still image cameras; in reference to para 6, the advocate further stated that cameras which are primarily still image camera should be covered under 85258900 and exemption under the said notification be applicable however, he raised apprehension that Customs field formation may raise objection as the said Circular talks about capability to take moving images for limited period of time; in this regard, he also invited attention to Sub-para (5) of para 2 of TRU letter issued from F.No. 334/5/2015-TRU dated 30.04.2015 wherein it is stated inter-alia that all digital still image video camera falling under 85258020 irrespective of their specifications [including the restriction with reference to video recording time] are being exempted from Basic Customs Duty vide Notification No. 12/2....
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....subject goods is not contested by Ld. DC in its comments; thus, for the sake of brevity, the applicant wishes to rely on the detailed submissions provided in Para 3.1 to Para 3.13 of CAAR application, in support of its proposed classification under Sub-heading 85258900 of the Customs Tariff; Digital Still Image Video Cameras other than Camera or Camera Module of cellular mobile phones falling under Sub-heading 85258900 have been given exemption from Basic Customs Duty vide SI. No. 502 of Notification No. 50/2017; at this juncture, it is relevant to note that the aforementioned entry in the Notification No. 50/2017 has been carried forward from Notification No. 12/2012-Cus (SI. No. 428A) dated 17.03.2012 (hereinafter referred to as 'Notification No. 12/2012') after the introduction of Goods and Service Tax regime; the Hon'ble Supreme Court of India in its decision of Government of Kerala vs Mother Superior Adoration Convent, 2021 (376) E.L.T. 242 (S.C.) has clearly highlighted the manner in which beneficial notifications must be interpreted; the Hon'ble Supreme Court held that any notification with a stated benefit must be interpreted to give full effect to the benef....
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....natory Notes; it refers to a class of cameras that are primarily suited for still image photography and also have the capability to record video; this intention can also be ascertained by application of Note 3 to Section XVI of Customs Tariff which requires goods to be classified as per their principal function; on application of the aforementioned legal principles, it is submitted that the impugned goods primarily exhibit higher capabilities towards still image photography for the following reasons, (i)Ergonomic Design of the subject goods resemble a traditional still image camera. Thus, making its use for still photography easier in comparison to video shooting, (ii) The Auto-focus points available in the subject goods are better equipped for still photography, (iii) The impugned goods are equipped with a mechanical shutter which is solely used in still image photography, (iv) The ISO capabilities (low light photography) are better for still image photography, (v) Image resolution is higher in comparison to video resolution, thus showcasing that the subject goods utilizes the full capability of its sensor during still photography, ....
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....ular No. 32/2007 is inapplicable to interpret Notification 12/2012; thus, by logical extension, it cannot be utilized to interpret its successor notification; therefore, the appellant is of the considered view that the conclusions reached by Ld. DC in respect of exemption eligibility under Notification No. 50/2017 (SI. No. 502) are incorrect; thus, for the aforementioned reasons, the applicant is of the view that it will be eligible to claim exemption benefit under Notification No. 50/2017 (SI. No. 502) in respect of import of the subject goods; lastly, it is prayed that the subject goods are classifiable under 85258900 of the First Schedule of Customs Tariff Act, 1975 and these are eligible to claim exemption from payment of Basic Customs Duty vide SI. No. 502 of Notification No. 50/2017-Cus. 7. Having completed the procedure laid down in the CAAR Regulations, I first allow the application, taking into account the facts of the case and submissions made by the applicant and the concerned Principal Commissioner of Customs. In view of the submissions made in the application for advance ruling, during the personal hearing and additional submissions of the applicant, I proceed to....
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....t a specified frame rate achieve an illusion of moving image; the minimum frame rate is about fifteen frames per second; the term 'digital still image video camera' covers only digital camera that have the capability of taking still images; this would also include digital cameras that take moving images for limited period of time although they are primarily still image cameras; such cameras fall under tariff item 85258020; however, digital cameras that can take both still images and moving images like camcorder or video recorder falling under tariff item 85258030 shall not be covered under the said entry; digital still image video cameras can also be differentiated from the still cameras of heading 9006 i.e. photographic film cameras; cameras of this type are also not eligible for the benefit of these notifications; it is clarified that benefit of entry at Sl. No. 314 of Notification No. 21/2002-Cus. as well as Sl. No. 13 of Notification No. 25/2005-Customs dated 1.3.2005 would be available to 'digital cameras' with still image recording as its principal function; this would also include those digital cameras that have the capability of recording moving images for a....
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....a single frame of video, which when played at a specific frame rate creates an illusion of a moving image. The applicant has also stated that the subject goods do not satisfy any of the conditions mentioned in Sub-Heading Note 1, 2 or 3 of Chapter 85 of the Customs Tariff; the cameras imported by the applicant are regular consumer goods for use in standard environments and use-cases. 9.4 I notice that comments of the concerned Principal Commissioner of Customs, ACC (import), New Delhi on applicability of SI. No. 502 of Notification No. 50/2017-Cus. dated 30.06.2017 are primarily based on the reason that the term 'digital still image video camera' covers only digital cameras that have the capability of taking still images; this would also include digital cameras that take moving images for limited period of time, although they are primarily still image cameras; as per the applicant's submission, the product under consideration will not have any limit on video recording capability in a single sequence; recording function will be dependent on the storage space and the temperature inside the camera; consequently, it appears that the subject goods falls out of the purview....