2015 (8) TMI 241 - SC - Customs

Classification of goods Business satellite receivers Entries 85.25 and 85.28 Held that -reading of Entry 85.28, would show that it pertains to only those apparatus which have function of receiving signals only and that they are reception apparatus Moment particular apparatus has transmission function as well, that would be excluded from Chapter Heading 85.28 Heading 85.25 deals with transmission apparatus, even if apparatus transmitting signals have additional functions of reception of signals as well Therefore Tribunal rightly classified goods of respondent under 8525.20 Order of commissioner taking contrary view was incorrect Appeal dismissed Decided in favour of Assesse.

Summary

Issues involved: Classification of goods under Chapter Heading entry 8525.20 or 8528.10.

Analysis:
The main issue in this appeal is the correct classification of the goods known as 'business satellite receivers' belonging to the respondent assessee. The dispute revolves around whether these goods should be classified under Chapter Heading entry 8525.20, as contended by the assessee, or under 8528.10, as argued by the Revenue. The critical distinction lies in the nature of the goods and their primary functions, specifically whether they primarily involve transmission apparatus or reception apparatus.

The respondent asserts that the 'business satellite receivers' have both transmitting and reception functions, thus falling under the description of 'transmission apparatus incorporating reception apparatus.' On the contrary, the Revenue argues that the essential or predominant character of the goods should determine their classification. The Revenue contends that the primary function of the satellite receiver is to receive signals before transmitting them, emphasizing the receiving aspect of the apparatus.

The Court, after considering the arguments presented, disagrees with the Revenue's submission. It interprets Entry 85.28, which the Revenue relies on for classification, as applicable only to apparatus solely designed for signal reception, excluding those with transmission functions. In contrast, Chapter Heading 85.25 deals with transmission apparatus, specifically clarifying that even if devices transmitting signals also have reception capabilities, they should be classified under 8525.20. Consequently, the Court upholds the Tribunal's decision to classify the respondent's goods under 8525.20, emphasizing the dual functionality of the apparatus.

Additionally, the Commissioner's reliance on Rule 2(b) for classification based on combination substance is deemed incorrect by the Court. The Commissioner's approach, considering the goods as classifiable under multiple headings, is refuted based on the specific nature of Entry 85.28, which pertains solely to reception apparatus without transmission functions. Therefore, the Court dismisses the appeal, affirming the Tribunal's classification decision under 8525.20 and ordering the refund of any excess duty paid by the respondent in accordance with the law.