2004 (9) TMI 262 - AT - Customs

Classification of Typhoon Easy Cam 110K complete set (Web Camera) - Refund of duty paid under protest on PC Camera - Whether the web camera which works as a part suitable for use solely and principally along with Computer falling under Heading 8471 or it can be considered as a Digital Camera for classification under Heading 8525.30 - HELD THAT - We notice from the extracted portion of the difference between Web Camera and Digital Camera that the web camera is different from the Digital camera even in terms of description in HSN Explanatory Notes at Page 1669 under Section XVI 85.25. The specific entry of the Digital Camera was brought out after amendment dated 1-3-2002 under heading 8525.40 under various descriptions like Still image video cameras and other video camera recorders . Admittedly, the item cannot be considered as video camera as video camera recorder has been placed along with the Digital camera. The Digital camera should be generally equipped with an optical viewfinder, a liquid crystal display (LCD), or both. In the present case, admittedly, the web camera is functioning as a part with the Computer. It cannot function independently. It does not have a viewfinder nor does it have memory which is a feature in Digital camera. In HSN Explanatory Notes at page 1669, states that the Digital camera is akin to Video camera and has all its features. Although the WCO Committee has made various observations pertaining to the web camera having the features of Digital camera, it also clearly describes that in many ways web camera is a bare bone version of a full version digital camera. It is not meant for mobile use. This explains the lack of an inbuilt power supply and storage. The web camera depends on the PC for both these requirements i.e. of power and storage. Therefore the findings of WCO Committee does not support the revenue at all for specific classification purpose. Web Camera may have features of Digital Camera in some aspects but it is not Digital Camera per se. Although the WCO Committee have noticed certain features of Digital camera and Web camera and according to their Minutes of Meeting mentioned in Para 27 of the Order-in-Original, admittedly, web camera functions along with PC. Therefore the earlier judgment of the Tribunal in case of Karamchand Thapar Bros. (C.S.) Ltd. v. Collector of Customs, Bombay, holding that camera and other spares/accessories also fall under Heading 84.71 in terms of Note 4 of Section XVI is a correct order which is required to be followed to a situation prior to and subsequent to the amendment. We are of the considered opinion that only the Digital camera which keeps in company into Video Camera would be classifiable under heading 8525.40 whereas the web camera would be classifiable under chapter 8473.30 or 84.71. The appellants succeed in their appeals and the same is allowed. On a careful consideration of the submissions made by both the sides and on perusal of the impugned order, we notice that the finding of the Commissioner (Appeals) is in keeping with the findings already recorded in the assessee's appeal. There is no merit in the Department's appeal and the same is rejected.

Summary

Issues Involved:
1. Classification of "Typhoon Easy Cam 110K complete set" (Web Camera).
2. Refund of duty paid under protest on PC Camera.
3. Classification of web camera imported by the appellants.

Summary:

Issue 1: Classification of "Typhoon Easy Cam 110K complete set" (Web Camera)
The primary issue in Appeal No. C/26/2003 was the classification of the item "Typhoon Easy Cam 110K complete set" (commonly known as Web Camera). The assessee claimed the classification u/s 8471.60 as computer parts and accessories, while the Department classified it u/s 8525.40 as "Digital Camera." The Tribunal noted that the web camera is different from a digital camera, as it functions solely with a computer and lacks features such as an optical viewfinder and memory. The Tribunal concluded that the web camera should be classified u/s 8473.30 or 8471.

Issue 2: Refund of Duty Paid Under Protest on PC Camera
In Appeal No. C/62/2003, the issue was the refund of duty paid under protest on PC Camera. The appellants claimed classification u/s 8473.30 as parts and accessories for computers, while the Department classified it u/s 8525.40 as "Digital Camera." The Commissioner (Appeals) had classified the item u/s 8525.40, but the Tribunal found that the web camera functions solely with a computer and does not meet the criteria of a digital camera. Therefore, the Tribunal allowed the appeal, classifying the web camera u/s 8473.30 or 8471.

Issue 3: Classification of Web Camera Imported by the Appellants
In Appeal No. C/188/2001, the Revenue challenged the Order-in-Appeal No. 18/2001-Cus., which classified the web camera u/s 8473.30 or 8471 instead of Chapter 90. The Commissioner (Appeals) had noted that the web camera functions only with a computer and has specific functions that make it part of the computer system. The Tribunal upheld this finding, rejecting the Department's appeal and confirming the classification u/s 8473.30 or 8471.

Conclusion:
The Tribunal concluded that web cameras should be classified u/s 8473.30 or 8471 as parts and accessories of computers, not as digital cameras u/s 8525.40. The appeals by the assessee were allowed, and the Revenue's appeal was dismissed.