2019 (2) TMI 505 - AT - Customs

Classification of imported goods - Video Conferencing System - classified under CTH 85176990 or under CTH 85176290 - whether the benefit of exemption under Notification No 24/2005-Cus (Sl No 13) admissible in respect of the goods imported by the appellant describing them as Video Conferencing system ? Held that - Codec, which is nothing but a coder/ decoder, is part of every system transmitting audio or video messages over a digital media and internet protocol. Codec cannot be distinguishing feature for the goods under import from the VOIP Equipments - there is no hesitation in holding that the goods imported are nothing but VOIP Equipment . Exemption Notification No 25/2004-Cus at Sl No 13 - benefit of exemption has been denied by the authorities below in respect of the goods sought to be cleared against specific bill of entry - Held that - The authorities below have rightly denied the benefit of exemption. We are not bound by the orders/ view taken by the authorities below in respect of the subsequent Bill of entries. It is for the revenue authorities to investigate that when Commissioner (Appeal) had disallowed the benefit of this exemption, and matter was sub-judice before us, why the assessing authorities have allowed the benefit of the exemption in case similarly placed imported goods. Chief Commissioner of the concerned ports should cause an investigation in the matter if they deem fit. However the incorrect/ erroneous order of an authority cannot be binding precedent and reason for allowing the benefit to the appellant. Heading 851762 & 851769 are double dashed heading. The heading 851762, covers specific category of equipments and devices which is for reception, conversion and transmission or regeneration of voice, images or other data. The equipments under import are used for reception, conversion and transmission or regeneration of voice and video (images) and hence get classified under double dash heading 851762, and at triple dash under heading 85176290 - the classification as made by the department is justifiable. Appeal dismissed - decided against appellant.

Summary

Issues Involved:
1. Classification of imported goods.
2. Eligibility for exemption under Notification No. 24/2005-Cus (Sl No 13).

Detailed Analysis:

1. Classification of Imported Goods:

The appellants filed a Bill of Entry for clearance of goods declared as "SX20 QUICK SET WITH 12 XPHDCAM, IMIC, REMOTE AND TC & SW, CTS-SX20-PHD12X-K9 (Video Conferencing System)" under CTH 85176990 and claimed exemption under Notification No. 24/2005-Cus (Sl No 13). The Revenue proposed to classify the goods under CTH 85176290 and denied the exemption.

The Deputy Commissioner of Customs classified the goods under CTH 85176290 and denied the exemption. The appellants contested this classification, asserting that the goods should be classified under CTH 85176990. They argued that the goods are not VOIP Phones but a Video Conferencing System comprising a Codec device, Microphone, Remote Camera, and Cables.

The tribunal examined the structure of headings 851762 and 851769, noting that heading 851762 covers devices for reception, conversion, transmission, or regeneration of voice, images, or other data. The tribunal concluded that the imported goods, used for reception, conversion, and transmission of voice and video, fall under heading 85176290. Thus, the classification by the department was deemed justifiable.

2. Eligibility for Exemption under Notification No. 24/2005-Cus (Sl No 13):

The appellants claimed that the Video Conferencing System should benefit from the exemption under Notification No. 24/2005-Cus (Sl No 13), which excludes specific VOIP equipment such as VOIP Phones, media gateways, gateway controllers, and session border controllers. They argued that the Video Conferencing System is different from VOIP Phones and should not be excluded from the exemption.

The tribunal considered expert opinions, including one from the Department of Telecommunications, which stated that the imported goods are "VOIP Equipment" used for video conferencing. The tribunal found this opinion more credible than those provided by the manufacturer and another expert, which lacked detailed justification.

The tribunal emphasized that the term "VOIP Equipment" in the notification should not be restricted to VOIP Phones alone. The exclusion clause in the notification, using the word "namely," indicates specific instances but does not limit the exclusion to those items alone. The tribunal held that the goods imported are VOIP Equipment and thus excluded from the exemption.

The tribunal also addressed the appellants' argument that subsequent imports of similar goods had been granted the exemption by other customs authorities. It was noted that each case must be decided on its own merits, and an erroneous order by one authority does not bind others to repeat the error.

Conclusion:

The tribunal upheld the classification of the imported goods under CTH 85176290 and denied the benefit of exemption under Notification No. 24/2005-Cus (Sl No 13). The appeal was dismissed, and the miscellaneous application was disposed of accordingly.