2023 (3) TMI 180 - AT - Customs

Non-speaking order - Modification of self assessment made by the appellant claiming the benefit of exemption under Notification No 50/2017- Cus (S No 502) without issuance of any speaking order as per Section 17 (5) of the Customs Act, 1962 - classification of GoPro Digital cameras and their accessories - to be classified under tariff heading 85258020, availing exemption under Notification No 50/2017-Cus (Sl No 502) or under heading 85258090 (without exemption benefit)? HELD THAT - Classification is made in accordance with the General Rules of Interpretation (GRIs). GRI 1 provides that the classification of goods shall be determined according to the terms of the headings of the tariff schedule and any relative section or chapter notes. From the plain reading of the heading 85258020, it is quite evident that for classification under this heading the goods under question should be a Digital Camera and the terms of the heading are not restricted to Digital Still Image Video Camera . All the cameras which are digital cameras get classified under this heading. Further revenue do not dispute that the goods covered by the referred bill of entries are action cameras . In para 7 of the impugned order specific finding has been recorded to this effect. In case of Panam Corporation 2020 (2) TMI 1434 - CESTAT MUMBAI for the period prior to insertion of the Explanation in 2012, tribunal refused to restrict the meaning given to the phrase Digital Still Image Video Cameras and allowed the benefit of exemption at Sl No 13 of 2005 notification. The findings recorded in the impugned order not agreed upon, to the effect that the phrases used in the Notification No 50/2017-Cus at Sl No 502 has to be interpreted in light of the Explanation which was there in some other Notification at any point of time, the interpretation of the Notification wherein explanation was given defining the phrase Digital Still Image Video Cameras need not be examined. The said explanation cannot be used to restrict the phrase used in the notification under consideration. If government intended that the said phrase should have been interpreted according to the explanation contained in the earlier notification then same explanation could have been inserted in the present notification. There are no merits in the said argument of the revenue because it is settled law that if two notifications are available to the importer at the same time in respect of the imported goods, then it is for importer to choose the exemption which is beneficial to him, revenue cannot force him to chose a particular exemption notification. The argument made by the revenue by the revenue that the exemption notification No 50/2017 Cus was General exemption Notification and Notification No 25/2005-Cus as amended by the Notification No 15/2012 dated 17.03.2012, is more specific for the goods under question, is still in existence and should have been applied, was rejected by the Hon ble Supreme Court in case of HCL. LIMITED VERSUS COLLECTOR OF CUSTOMS, NEW DELHI 2001 (3) TMI 971 - SC ORDER . There are two notifications one of which impose a restriction in terms of capacity and time limitation of the recording, whereas the other do not impose and such restriction, once it is found that the imported action camera qualifies as Digital Still Image Video Camera , benefit of exemption under the notification no 50/2017-Cus cannot be denied. Since no speaking order has been made either by the assessing officer Commissioner (Appeal) and matter remanded to the assessing officer to pass an speaking order, there are no any infirmity in the order of the Commissioner (Appeals). All the appeals are allowed in the cases where the bill of entries pertain to importation of the Digital Cameras by the appellant, holding that the benefit of exemption under Notification No 50/2017-Cus as claimed by them will be admissible to the appellant - Matter is referred back to the original assessing officer to assess the Bill of Entries as per directions contained in this order.

Issues Involved:
1. Correct classification of imported GoPro Digital Cameras.
2. Admissibility of exemption under Notification No. 50/2017-Cus (Sl No 502).
3. Requirement of a speaking order under Section 17(5) of the Customs Act, 1962.

Detailed Analysis:

1. Correct Classification of Imported GoPro Digital Cameras:
The primary issue was whether the imported GoPro Digital Cameras should be classified under tariff heading 85258020 as "Digital Cameras" or under heading 85258090 as "Other." The appellant classified the cameras under 85258020, claiming they were digital cameras. The assessing group modified the classification to 85258090, arguing that the cameras also recorded videos, thus not fitting the "Digital Camera" category.

The tribunal examined the relevant tariff headings and HSN explanatory notes. It found that heading 85258020 covers "Digital Cameras," which includes cameras capable of recording both still and moving images. The tribunal noted that the classification should be based on the primary function of the camera and that the imported GoPro cameras, being digital cameras, should be classified under 85258020. The tribunal's view was supported by previous decisions, including a U.S. Court of International Trade ruling and earlier tribunal decisions in similar cases.

2. Admissibility of Exemption under Notification No. 50/2017-Cus (Sl No 502):
The appellant claimed exemption under Notification No. 50/2017-Cus, which provides a nil rate of duty for "Digital Still Image Video Cameras" classified under 85258020. The Commissioner (Appeals) denied this exemption, citing an explanation from an earlier notification (No. 15/2012-Cus) that defined "Digital Still Image Video Cameras" as cameras not capable of recording video with certain specifications.

The tribunal rejected this reasoning, stating that the explanation from the earlier notification should not restrict the interpretation of the current notification. It emphasized that the government could have included the same explanation in Notification No. 50/2017-Cus if it intended to impose such restrictions. The tribunal concluded that the benefit of exemption under Notification No. 50/2017-Cus should be granted to the appellant, as the imported cameras met the criteria of "Digital Still Image Video Cameras."

3. Requirement of a Speaking Order under Section 17(5) of the Customs Act, 1962:
The appellant argued that the modification of the assessment was done without issuing a speaking order as required under Section 17(5) of the Customs Act, 1962. The tribunal noted that in some cases, the Commissioner (Appeals) had remanded the matter back to the assessing officer for passing a speaking order, while in other cases, the appeals were decided on merits without such an order.

The tribunal directed the assessing officer to finalize the assessment orders as per its observations, ensuring compliance with Section 17(5) of the Customs Act, 1962. It emphasized the importance of issuing a speaking order to provide clarity and transparency in the assessment process.

Judgments Delivered by the Tribunal:
1. Appeals against the re-assessment orders were allowed, setting aside the impugned orders and directing the original assessing officer to assess the Bill of Entries as per the tribunal's directions.
2. Miscellaneous applications for early hearing were allowed, and the appeals were taken up for hearing together.
3. Appeals where the matter was remanded back for passing a speaking order were dismissed, with directions to the assessing officer to decide the matter in remand proceedings, taking note of the tribunal's observations.

Conclusion:
The tribunal's judgment clarified the correct classification of imported GoPro Digital Cameras under tariff heading 85258020 and granted the benefit of exemption under Notification No. 50/2017-Cus. It also emphasized the requirement of issuing a speaking order under Section 17(5) of the Customs Act, 1962, to ensure transparency and compliance in the assessment process.

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