2001 (11) TMI 339 - AT - Customs

Summary

Issues:
Classification of imported goods under sub-heading 8517.90 or 8517.50 of the Customs Tariff Act.

Analysis:
The appeal involved the classification of goods imported by M/s. HCL Comnet Systems and Services Ltd. Specifically, the issue was whether one piece of CX 1004 B 37 Model 5399-62 module should be classified under sub-heading 8517.90 as claimed by the appellant or under sub-heading 8517.50 as confirmed by the Commissioner (Appeals) in the impugned order.

Appellant's Argument:
The appellant's representative, Shri Shriniwas Kotni, argued that the imported card, Versalar 5399, is a part of the Versalar System 5000, which functions as a remote access server. He emphasized that the card is useless independently and only functions when installed in the system. The appellant contended that mentioning a specific classification in the bill of entry does not constitute mis-declaration, citing a precedent where claiming a particular heading does not amount to mis-declaration. The appellant also argued that the imported item should be classified as a part, not a data/fax modem, citing relevant case law to support this classification.

Respondent's Argument:
On the other hand, Shri Ashok Kumar, representing the Respondent, referred to the Explanatory Notes of HSN to argue that the imported item, Versalar 5399, is a modem classified under sub-heading 8517.50. He highlighted that the appellant themselves described the item as a concentrator or a bank of modems in their appeal memorandum. The Respondent also pointed out that the earlier consignment of the same product was classified under sub-heading 8517.50, indicating a mis-declaration by the appellant in the current import.

Judgment:
The Tribunal considered both arguments and focused on whether Versalar 5399 should be classified as a part of the Versalar System 5000. The Tribunal noted that the imported item is not necessary to complete the system and, therefore, cannot be considered a part of it. Drawing an analogy with a cassette in a cassette recorder, the Tribunal concluded that the item is not a part of the system. However, the Tribunal agreed with the appellant that there was no mis-declaration in mentioning the classification under sub-heading 8517.90. The Tribunal held that the Customs Authority determines the final classification, and as there was no incorrect description provided by the appellant, there was no successful case of mis-declaration. Consequently, the Tribunal set aside the confiscation of the imported product, along with the redemption fine and penalty, disposing of the appeal in favor of the appellant.