2011 (3) TMI 1570 - AT - Customs

Issues Involved:
Classification of an imported printer under the appropriate Customs Tariff Heading (CTH).

Issue-wise Detailed Analysis:

1. Classification of the Printer:
The primary issue is the classification of a printer imported by the Respondent under Bill of Entry No. 123629, dated 25-1-2006. The printer, described as a "NIPSON 8000 SED Laser printer with inbuilt data management computer with varypress print Server and IPDS data interface including start up supplies and start up spare parts," was initially classified by the Assistant Commissioner under Tariff Item 84436090 of the Customs Tariff. However, the Commissioner (Appeal) reclassified it under Tariff Item 84716026, leading to the department's appeal.

2. Revenue's Argument:
Revenue contends that the printer should be classified under CTH 8443, as per the explanatory notes to CTH 8471 and Note 5 to Chapter 84. According to these notes, a unit of an automatic data processing system must perform a data processing function and meet specific criteria. Revenue argues that the printer, which works in conjunction with an automatic data processing machine and has characteristics of a printing machine designed for specific functions in the printing or graphics industry, should be classified under Heading 8443.

3. Chapter Notes 5(B) to 5(E) of Chapter 84:
Both sides rely on Chapter Notes 5(B) to 5(E) to support their viewpoints. These notes detail the conditions under which units of an automatic data processing system are classified, including their connection to the central processing unit and their ability to accept or deliver data in a usable form. Note 5(E) specifies that machines performing specific functions other than data processing, even if they work in conjunction with an automatic data processing machine, should be classified according to their respective functions.

4. Respondent's Argument:
The Respondent argues that CTH 8443 covers printing machinery using printing type, blocks, plates, cylinders, and other components, which excludes the imported Laser Jet Printer. They emphasize that the printer generates images using a computer and toner without the use of plates or ink transfer, making it distinct from machinery covered under CTH 8443. The Respondent also notes that the printer cannot function without being connected to a computer, stores data for printing, and resumes printing automatically, aligning it more closely with units of an automatic data processing system under Heading 8471.

5. Rule 3(a) of the General Rules for Interpretation:
The Respondent cites Rule 3(a), which states that the heading providing the most specific description should be preferred over more general descriptions. They argue that the Laser Jet Printer is specifically covered under CTH 84716026.

6. Interpretation of Notes 5(B), 5(C), and 5(D):
The Respondent further argues that the printer meets the conditions of Note 5(B) as it is solely used in an automatic data processing system, is connectable to a central processing unit, and can accept data in signal form. According to Note 5(C), separately presented units of an automatic data processing machine are classified under Heading 8471. Note 5(D) explicitly includes printers that meet these conditions, reinforcing their classification under Heading 8471.

7. Consideration of Arguments:
The Tribunal considered arguments from both sides. The Revenue's reliance on HSN notes and their interpretation was scrutinized. The Tribunal noted that the main function of the printer is to serve as an output for information stored in a computer, fitting the description under Heading 8471. The size of the printer and its ability to print on various materials were deemed irrelevant to its classification.

8. Conclusion:
The Tribunal concluded that the printer satisfies all conditions laid down in Chapter Note 5(B) of Chapter 84 and specifically those in Notes 5(B)(b) and 5(B)(c). Therefore, as per Note 5(D), it is classifiable under Heading 8471. The Tribunal rejected the Revenue's argument that the printer should be classified under Heading 8443, as it does not use printing type, blocks, plates, cylinders, or other components of Heading 8442.

Final Judgment:
The appeal was rejected, and the order of the Commissioner (Appeal) was upheld, classifying the printer under Tariff Item 8471 60 26. The Tribunal emphasized that the rate of duty under this Tariff Item being zero cannot justify distorting the descriptions in the headings, tariff items, chapter notes, and interpretative rules to deny the benefit provided in the tariff. The judgment was pronounced in open court on 23-2-2011.

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