TaxTMI 
TaxTMI 
2004 (9) TMI 262
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....der sub-heading 8471.60 as input or output units, whether or not containing storage units in the same housing. The Department has classified the item under sub-heading 8525.40. Alternatively they pleaded for classification under Heading 8473.30 as parts and accessories of the machines under Chapter Heading 8471. The Chapter heading 8473 reads 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. The Department has considered the item to be "Digital Camera" under sub-heading 8525.40 after amendment of tariff which reads "Still image video cameras and other video camera recorders; Digital cameras". C/62/2003 : 4. This appeal arises in Order-in-Appeal No. 81/2003-Cus., dated 24-2-2003 which relates to refund of duty paid under protest on PC Camera as the appellants have claimed the classification of the item under sub-heading 8473.30 as parts and accessories for machines of Heading 84.71, i.e. parts and accessories for Computer suitable for use solely or principally with machines of Headings 84.69 to 84.72. However, the Department has rejected the plea and has classified the ite....
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....machine is required only to transfer or further process the images already captured. To function, web camera totally depends on an ADP machine. 3. Digital camera can be connected directly to a printer/TV/digital photo-processing machines. Web camera can only be connected to ADP machine through USB port. Web camera cannot work with any other equipment or other machines of any sort. 4. In case of digital camera, it has cables which are optional/additional accessories, these cables can be connected to various equipments such as TV, VCR and one of the cables among them can be connected to the ADP machine. The Web camera has a built in cable which eminates from inside This cable cannot be separated from the unit (web camera) this can only be connected to an ADP machine, and not to any other machines. 5. Many digital cameras may also function as web camera. Web camera cannot function as digital camera under any circumstances. 6. Digital camera come with either LCD display or view finder to preview the image which is to be captured. In web camera there is no LCD display or view finder in a web camera. 7. Digital camera have their own power s....
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....h an automatic data processing machines are excluded from Note 5(E) of Chapter 84. It is pointed out that in terms of Explanatory Notes at page 1669 under Chapter 8525, the Digital Cameras record images in digital form. These cameras are generally equipped with an optical view finder, a liquid crystal (LCD) , or both. The LCD may be used as a view finder when taking pictures or as a screen for viewing pictures which have been recorded or downloaded. There is no LCD display or view finder in a web camera. Therefore web camera is solely and exclusively used with computers and as such classifiable under heading 8473.30 as parts and accessories and machines of heading 8471. The learned Counsel therefore also relied on HSN Notes at page 1575 under heading 8471 and page 1576-1577. At page 1577, HSN Notes read as follows - "A unit is to be regarded as being a part of a complete digital data processing system, if it satisfies the following conditions : (a) It is of a kind solely or principally used in an automatic data processing system; (b) It is connectable to the central processing unit either directly or through one or more other....
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....rage. In addition, as it is meant for use in a static position, a viewfinder is not a design feature. A web camera is usually positions statically over a monitor of the ADP machine, directly facing the user, so that it can be used for Video and audio application, like video conferencing. In all other features of principle of working and constituent elements the web camera is identical to a digital camera.....". The reliance on this Para along with the findings in the Order-in-Original and reliance on the deliberations of the Committee should be given weightage and should be treated as a web camera which is specified in the said heading of Digital Camera. The web camera is specifically to be considered as Digital Camera included under heading 8425.40 along with still image video camera and other video camera recorders. She pointed out that the judgment referred in case of Karamchand Thapar & Bros.(C.S.) Ltd. v. Collector of Customs, Bombay - 1994 (71) E.L.T. 619 (Tribunal) is pertaining to earlier period and not the period when web camera classified under heading 8485.70. 7. On a careful consideration of the submissions made by both the sides, we notice from the extracted port....
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....gs appropriate to their respective functions or, failing that, in residual headings. Even as per Note 5(E), the Commissioner has noted that the item does not have a specific function as it works in conjunction with an automatic data processing machine. Therefore both the authorities have fallen in error in considering the item as Digital Camera. The Notification No. 76/04-Cus. dated 26-7-2004 has exempted CPU and CPU with monitor, mouse and keyboard and web camera imported separately. Although the WCO Committee have noticed certain features of Digital camera and Web camera and according to their Minutes of Meeting mentioned in Para 27 of the Order-in-Original, admittedly, web camera functions along with PC. Therefore the earlier judgment of the Tribunal in case of Karamchand Thapar & Bros. (C.S.) Ltd. v. Collector of Customs, Bombay, holding that camera and other spares/accessories also fall under Heading 84.71 in terms of Note 4 of Section XVI is a correct order which is required to be followed to a situation prior to and subsequent to the amendment. We are of the considered opinion that only the Digital camera which keeps in company into Video Camera would be classifiable under h....