2003 (10) TMI 598 - AT - Customs

Issues Involved:
1. Classification of imported goods (Voice Processing Boards/Voice Fax Processing Boards and Springware Software).
2. Eligibility for benefit under Notification No. 20/99-Cus.
3. Imposition of differential duty and penalty under Section 114A of the Customs Act.
4. Confiscation of goods and imposition of redemption fine.

Detailed Analysis:

1. Classification of Imported Goods:
The appellants imported Voice Processing Boards/Voice Fax Processing Boards from M/s. Dialogic Corporation, USA, and claimed assessment under chapter sub-heading 8473.30 as parts of computers. In another Bill of Entry, they declared the goods as Springware Software, claiming classification under sub-heading 8524.99 with the benefit of Notification No. 20/99-Cus. The department, however, classified the items as parts of Telephony System under chapter heading 8517.90 and denied the benefit of the notification.

2. Eligibility for Benefit under Notification No. 20/99-Cus:
The appellants argued that the items should be classified as software, eligible for the benefit under Notification No. 20/99-Cus. They relied on a similar case, M/s. Bay Talkitec Pvt. Ltd. v. CC, Chennai, where the Tribunal had decided in favor of classification under heading 8524.99. The Tribunal in the current case found that the technical evidence and expert opinions presented were consistent with the earlier case, confirming that the items were indeed software and not parts of telephony equipment.

3. Imposition of Differential Duty and Penalty under Section 114A of the Customs Act:
The department imposed differential duty and penalty on the grounds of misdeclaration. However, the Tribunal noted that the appellants had provided detailed technical evidence and expert opinions supporting their classification. The Tribunal found that the department had disregarded these opinions without proper justification. The Tribunal concluded that there was no misdeclaration or suppression of facts by the appellants, and thus, the imposition of differential duty and penalty was not justified.

4. Confiscation of Goods and Imposition of Redemption Fine:
The Commissioner had ordered the confiscation of the goods with a redemption fine of Rs. 2 lakhs. The Tribunal, however, found that the confiscation order was not sustainable. They referred to the earlier judgment in CCE, Madras v. Aradhi Associates, which had set a precedent that disregarding expert opinions without proper basis was not acceptable. Consequently, the Tribunal set aside the confiscation order and the imposition of the redemption fine.

Conclusion:
The Tribunal, after careful consideration of the submissions and technical evidence, followed the ratio of the earlier order in the case of M/s. Bay Talkitec Pvt. Ltd. They concluded that the imported items were software and not parts of telephony equipment, thus eligible for the benefit under Notification No. 20/99-Cus. The orders imposing differential duty, penalty, and confiscation were set aside, and the appeals were allowed with consequential relief.

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