1989 (7) TMI 234 - AT - Customs

Summary

Issues Involved:
1. Classification of the Colour Graphic Display Terminal under Notification No. 186/87-Cus., dated 29-4-87.
2. Eligibility for exemption under Notification No. 282/84-Cus., dated 9-11-84.

Issue 1: Classification under Notification No. 186/87-Cus.
The primary issue is whether the Colour Graphic Display Terminal imported by the appellants qualifies as a "terminal" under Serial No. 8 of Notification No. 186/87-Cus., attracting a basic Customs duty of 60% ad valorem. The appellants filed Bill of Entry No. 206528 dated 19-9-87 for clearance of goods described as Colour Graphic Display Terminal, claiming the benefit of Notification No. 186/87-Cus. The imported items included systems like a central processing unit, display memory board, trend memory monitor, disk drive, keyboard, DS software, video generator board, etc.

The Department of Electronics clarified that the equipment is an intelligent graphic display station serving as a console terminal to the programmable logic controller and is more akin to a computer. Despite this, the Additional Collector of Customs denied the benefit of Notification No. 186/87, stating that the item was more than a terminal.

Upon review, the tribunal considered extensive technical literature and definitions from various authoritative sources, including the New Penguin Dictionary of Electronics and the Encyclopedia of Industrial Automation. These sources consistently defined an intelligent terminal as a type of terminal. The tribunal concluded that the imported item is indeed a terminal, as it fits within the broad definition of a terminal, which can include both dumb and intelligent terminals. Therefore, the tribunal held that the item imported by the appellants is a "graphic visual display terminal" covered under Serial No. 8 of Notification No. 186/87-Cus., and entitled to the benefit of exemption under that notification.

Issue 2: Eligibility for Exemption under Notification No. 282/84-Cus.
Alternatively, the appellants argued that the imported item should be considered a computer entitled to exemption under Notification No. 282/84-Cus., dated 9-11-84. The Joint Director of the Department of Electronics issued an NMI Certificate for Computer Imports, recommending exemption under Notification No. 282/84. However, the Additional Collector of Customs denied this benefit, relying on the Department of Electronics' clarification that the imported item is closer to a computer but distinct from it.

The tribunal did not need to delve deeply into this issue as it had already determined that the imported item qualified as a terminal under Notification No. 186/87-Cus. The tribunal noted that the Customs authorities are bound by the clarification issued by the Department of Electronics, which is the highest authority dealing with computers in the Government of India. The tribunal referenced the Bombay High Court's decision in 1982 (10) E.L.T. 171 [Bombay Chemicals (P) Ltd. v. Union of India], which held that Customs authorities are bound by certificates issued by the D.G.T.D. and cannot ignore them.

Conclusion:
The tribunal allowed the appeal, holding that the imported item is a "graphic visual display terminal" under Serial No. 8 of Notification No. 186/87-Cus., dated 29-4-1987, and therefore entitled to the benefit of exemption under that notification. Consequently, the appellants are entitled to a refund of the excess duty paid.