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Issues Involved:
1. Classification of driver software on CD imported along with printers. 2. Applicability of Section 19 of the Customs Act, 1962 and the Accessories (Conditions) Rules, 1963 for assessment of the imported printer and driver software. Issue 1: Classification of Driver Software on CD Imported Along with Printers The appellants imported HP Office Jet V40 print-fax-copy-scanner with an invoice value of US $150.27 per piece. They filed a Bill of Entry splitting the value into US $147.57 for the printer and US $2.70 for the driver installation software on CD. They claimed classification of printers under sub-heading 8471.60 with a basic duty of 15% and the driver software under sub-heading 8524.39 chargeable to nil rate of duty under Sr. No. 285(i) of Notification No. 17/2001-Cus., dated 1-3-2001. The Assistant Commissioner ordered the printer and driver software to be assessed together under sub-heading 8471.60, but the Commissioner (Appeals) reversed this order. The department appealed, arguing that the driver software is universally supplied with the printer and its price is included in the printer's price. They contended that the software cannot be classified separately as it is integral to the printer's functionality. After hearing both sides and reviewing case records, the Tribunal found that according to Rule 1 of the General Interpretative Rules (GIR) and Chapter Note 6 under Chapter 85, the driver software on CD should remain classified under Heading 85.24 even when presented with the apparatus for which it is intended. The Tribunal concluded that the printer is classifiable under 8471.60 and the driver software on CD under 8524.39. The software was not embedded or integrated with the apparatus but imported along with it separately. Issue 2: Applicability of Section 19 of the Customs Act, 1962 and the Accessories (Conditions) Rules, 1963 The Tribunal considered whether Section 19 of the Customs Act, 1962, and the Accessories (Conditions) Rules, 1963, could be applied for the assessment of the imported printer and driver software. The learned Advocate for the Respondent argued that Section 19(b) is not applicable after the amendment of the Customs Tariff Act in 1986. However, the Tribunal disagreed, stating that Section 19 remains an important provision for determining duty where goods consist of articles liable to different rates of duty. Section 19 allows assessment for a set of articles at the highest rate applicable if separate value is not available, with provision for separate assessment when evidence of separate values is provided. The Tribunal noted that the printer and software merit classification under separate headings and since the value was not split in the invoice, the assessment by the original adjudicating authority applying Section 19 was correct. The Tribunal held that the printer merits classification under sub-heading 8471.60 and the driver software on CD under sub-heading 8524.39. However, both together are liable for assessment under sub-heading 8471.60 on a combined value of US $150.27 per piece, as no separate value was indicated for the software in the invoice or price list. The provisions of Section 19 of the Customs Act, 1962, and Accessories (Conditions) Rules, 1963, were applied correctly by the original adjudicating authority. Conclusion: The Tribunal set aside the impugned order-in-appeal and restored the order-in-original, allowing the department's appeal. The printer and driver software on CD are to be assessed together under sub-heading 8471.60 on a combined value of US $150.27 per piece.
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