CELETRONIX INDIA PVT. LTD. Vs. COMMISSIONER OF CUSTOMS

JUDGEMENT

(1.) THIS is an appeal against the Order No. 597/2005 dated 20/09/05 passed by the Commissioner of Customs (Appeals), upholding the classification of "Compact Media Centre" (CMC) or "K -Yan Computer Systems" under the chapter heading 85283020 of the schedule co Customs Tariff Act/Central Excise Tariff Act as 'video projector'. M/s. Celetronix India Pvt. Ltd, Chennai, an EOU had filed a Bill of Entry for effecting clearances to DTA of what is declared as "Computer System K -Yan 103 (ILF23 -K -YAN 1.3)" of a total value of Rs. 6,70,734/ - @ Rs. 74,5267 - per unit classifying the goods under Chapter Sub Heading (CSH) 84714191 of both Customs and Excise Tariff Acts. Before the lower appellate authority, the appellants had submitted a technical write -up along with a statement from a Professor of IIT, Mumbai and a letter conveying the opinion of the Additional Director, Ministry of Communications and Information Technology, Department of Information Technology, Government of India in support of the classification claimed. The write -up described the item as an integrated computer system, a new product, for group learning. The machine has a powerful projector attached to it for the purpose.

(2.) AS per the user manual, the product is a Compact Media Centre (also called 'K -Yan') with multifarious uses for classrooms, coaching classes, mini theatres, corporate offices, mini community centres, rural areas etc. The system is a multimedia unit, which can play DVDs/VCDs/Audio CDs and provides ultra large flat TV experience. It can play movies, TV channels, songs and can be used to -play games. Accessories such as additional speakers can be attached to it to enhance the sound; with a web camera and broad band connection it would be a cheap Audio -Video conferencing solution for corporate offices and home uses.

(3.) AFTER due process of law, the lower appellate authority decided the item to be a video projector. He found the item to be a composite machine which could be classified as computer under Customs Tariff Heading (CTH) 8471 or as a video projector under CTH 8528 or as a DVD/VCD/CD player under CTH 8521 or as a Television set under CTH 8525 etc. Therefore, the principal function of the equipment had to be identified for its correct classification. The Commissioner found that replacement of a computer screen with the data projector had 'synergised' the product from being a mere personal computer for use by one person, to a machine capable of mass entertainment and knowledge. Yet the machine was not far removed from a computer, since that was what gave the machine its versatility. He found it difficult to classify the product in view of its multiple functions. In classifying the product, the Commissioner followed Rule 3(c) of General Interpretative Rules. He found its main functions to be computing and video projection and that the item equally merited classification as either. Therefore, Rule 3 (a) and 3(b) of the Interpretative Rules were not helpful. So he resorted to Rule 3 (c) and Customs Tariff Heading 8528 being the latter in the numerical order of the two options, classified the item under CTH 8528.