2007 (7) TMI 29 - AT - Customs

Classification - Revenue contented that goods (GPS 12 CX) imported by assessee is classifiable under Heading 85.26 not under Heading 90.14 claimed by assessee - Held that revenu8e contention was correct and allowed

Summary

Issues:
Classification of equipment "GPS 12 CX" - Whether classifiable as Radio Navigational Aid Apparatus under Heading 85.26 or as a Direction Finding Compass under Heading 90.14.

Analysis:
1. The dispute in this appeal revolves around the classification of the equipment "GPS 12 CX." The original authority classified it under Heading 85.26, while the first appellate authority classified it under Heading 90.14. The appellate authority considered the item to be an improved hand-held navigational equipment capable of continuous position updates through a receiver with 12 channels. They referred to HSN Explanatory Notes, which indicated that Heading 90.14 covers direction-finding compasses and other navigational instruments. Thus, the item was finalized under SH 9014.10, ruling out classification under Heading 85.26 as it was not considered a radio navigational aid apparatus.

2. The appeal by the Revenue argued that the equipment is a radio navigational apparatus and should be classified under Heading 85.26. They claimed that the apparatus receives signals from satellites, analyzes them, and locates its position accurately. They emphasized that even one-way signal transmission constitutes radio communication. The GPS system consists of segments operated by the US Air Force, with the user segment, including the GPS receiver equipment, responsible for calculating the user's position. Both parties relied on HSN Explanatory Notes, with Heading 85.26 covering radio navigational aid equipment and Heading 90.14 encompassing direction-finding compasses.

3. Upon careful consideration, it was noted that Heading 85.26 covers radio navigational aid apparatus based on radio waves, while Heading 90.14 covers direction finding compasses without reference to radio waves. The GPS equipment receives signals from satellites to calculate position, indicating its navigational use. The HSN Notes under both headings did not suggest a technology involving radio signal transmission. The exclusion of radar apparatus and radio navigational aid apparatus from Heading 90.14 further supported the classification under Heading 85.26 for the equipment in question.

4. The Commissioner (Appeals) did not adequately consider materials indicating the GPS equipment's reliance on radio signals transmitted by satellites. The 'New Dictionary of Scientific and Technical Terms' highlighted the equipment's ability to receive signals from satellites for accurate positioning, a crucial aspect overlooked in the classification process.

5. Considering the above analysis, the equipment "GPS 12 CX" was held classifiable under SH 8526.91, leading to the setting aside of the impugned order and allowing the appeal in favor of the Revenue.