2020 (2) TMI 1434 - AT - Customs

Classification of imported goods - TCL brand Digital Video Camera Model DV710 - to be classified under CTH 8525 80 20 as digital camera, or under CTH 8525 80 30 as video camera recorders - benefit of Sl. No. 13 of exemption Notification No. 25/2005-Cus - HELD THAT - The impugned goods have capacity to record video images also in addition to still images. Furthermore, on perusal of the literature submitted by the appellants, it is clear that the accessories of cameras include PC connection set indicating that they store images and/or video are stored digitally (without a film) in the camera and can be viewed digitally on other devices like computer etc. This conforms to the explanatory notes. Moreover, the notification does not define the cameras but says that the exemption is applicable to Digital Still Image Video Cameras - Hon ble Apex Court in the case of ASSOCIATED CEMENT CO. LTD. VERSUS STATE OF MP AND OTHERS 2004 (5) TMI 304 - SUPREME COURT , held that when the words in the notification have not been specifically defined, then their popular or commercial meaning given by those dealing with them has to be resorted to. In view of the fact that the Tariff classification of the goods as per HSN is determined according to the standards prescribed by the World Customs Organisation, where India is a member country, we are of the considered opinion that the declaration made by the U.S. Court in respect of classification of the subject goods should have persuasive value in consideration of the classification of the disputed goods under CTH 8525 80 20 in the present case. In view of Circular No. 32/2007, dated 10-9-2007, exemption will be available to Digital Cameras with still image recording as the principal function. This should also include those digital cameras that have the capability of recording moving images for a limited period of time. We find that the appellants submit that on testing the product, if would be clear that the number of still image photos clicked would be about 200, whereas, at the same time, the video recording/shooting would be not more than 3 to 3.5 minutes - Revenue has not denied the fact and have not recorded any findings contracting the submissions of the appellant. The appellants also submit that the packaging indicated the impugned goods to be digital still image video camera and the functions are explained in the Manuals. We find that as per the HSN Explanatory Notes, the impugned goods are digital cameras. Therefore, the exemption contained in Circular No. 32/2007 is applicable to digital still image video cameras. It is not the case of the Department that the impugned goods are not digital cameras. Once the fact is established, exemption cannot be denied. Moreover, it is also not denied that the impugned cameras have a limited capability of recording videos. Even as per the Circular, such cameras are eligible for exemption. The impugned TCL-DV710 cameras imported by the appellants are eligible for exemption, applicable to Digital Still Image Video Cameras , in terms of Circular No. 32/2007 - Appeal allowed - decided in favor of appellant.

Summary

Issues Involved:
1. Classification of TCL brand Digital Video Camera Model DV710.
2. Eligibility for exemption under Notification No. 25/2005-Cus.

Detailed Analysis:

1. Classification of TCL brand Digital Video Camera Model DV710:

The appellants classified the imported TCL brand Digital Video Camera Model DV710 under CTH 8525 80 20 as digital cameras and claimed the benefit of Sl. No. 13 of exemption Notification No. 25/2005-Cus. The department, however, classified the goods under CTH 8525 80 30 as video camera recorders and denied the exemption.

The appellants argued that the goods are correctly classifiable under CTH 8525 80 20, which covers all digital cameras without any condition or exception. They contended that CTH 8525 80 30 is inappropriate as it covers video camera recorders other than digital cameras. The imported goods, being digital cameras, cannot be classified under CTH 8525 80 30. The department's case was that the exemption would only be available for cameras that take moving images for a limited period of time.

The Tribunal noted that the impugned goods have the capacity to record video images in addition to still images. The literature submitted indicated that the cameras store images and/or videos digitally, which conforms to the explanatory notes. The Tribunal referred to the U.S. Court of International Trade, which held that a 'digital still image video camera' is one capable of recording both photographs and videos in digital format, and should be classified under 8525 80 40 as digital still image video cameras. This classification was persuasive for the Tribunal in considering the classification of the disputed goods under CTH 8525 80 20.

2. Eligibility for exemption under Notification No. 25/2005-Cus:

The appellants submitted that the number of still photos would be 200, whereas the video recording would not be more than 3.5 minutes. They argued that the C.B.E. & C. Circular No. 32/2007, which stipulates that the video recording should be for a limited time, is not supported by any authority or literature and is incorrect. The product satisfies the conditions laid down in the circular, and similar imports were granted exemption in December 2009.

The Tribunal examined Circular No. 32/2007, which clarified that the benefit of the exemption would be available to 'digital cameras' with still image recording as the principal function, including those that can record moving images for a limited period of time. The Tribunal found that the impugned goods are digital cameras and that the exemption contained in the circular is applicable to digital still image video cameras. The department did not deny that the impugned goods are digital cameras or that they have a limited capability of recording videos. Consequently, the Tribunal held that the exemption could not be denied.

The Tribunal concluded that the impugned TCL-DV710 cameras imported by the appellants are eligible for exemption as 'Digital Still Image Video Cameras' under Notification No. 25/2005-Cus. The appeal was allowed with consequential benefits.