2010 (6) TMI 373 - AT - Customs

Classification and valuation - Media Workstation Non-linear Editing System - software was imported for the specific purpose of use in conjunction with the automatic data processing system which was also imported in the same consignment, for the specific purpose of editing cinematographic films - application software was not intended for any other application but for such editing - media workstation software integral part of the system (editing system) imported by the appellant and, therefore, for the purpose of both classification and valuation, it should stand included with the rest of the system - appellant would stand classified under SH 8471.49 and the total invoice value thereof includible in the assessable value - assessing authority to reassess the goods

Summary

Issues: Classification and valuation of imported goods

Classification Issue:
The dispute in this case revolves around the classification of goods imported by the appellant. Initially described as "Media Workstation Non-linear Editing System" and classified under 8471 10 00, the appellant later sought to amend the bill of entry. The importer argued that the pentium computer with accessories and operating software should be classified under Heading 84.71 (SH 8471.49) based on Chapter Notes 5(A) and 5(B) to Chapter 84. On the other hand, the Revenue contended that the system, imported for editing purposes, should be classified according to Chapter Note 5(E) as a machine performing a specific function in conjunction with an automatic data processing machine. The supplier's literature indicated that the CPU and software could only be classified as an automatic data processing machine/system. The software, etched on the hardware, was meant for editing and was integral to the system. The Tribunal held that the software, being an integral part of the system imported for editing cinematographic films, should be classified along with the system under Heading 84.71 or 85.43. The decision was supported by the Supreme Court's ruling in a similar case. The Tribunal emphasized that the software imported in a form etched on hardware forming an integral part of the system should not be excluded from the assessable value.

Valuation Issue:
Regarding the valuation of the imported goods, the Tribunal found that the entire system imported by the appellant should be classified under SH 8471.49, and the total invoice value should be included in the assessable value. The assessing authority was directed to reassess the goods based on this decision and grant any consequential benefits to the assessee as per the law. The Tribunal concluded the appeal with this direction, ensuring a comprehensive resolution to the classification and valuation issues presented in the case.