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Issues Involved:
1. Classification of educational audio picture cards imported by the appellant. 2. Determination of the applicable Customs Tariff heading for the imported goods. Detailed Analysis: Issue 1: Classification of Educational Audio Picture Cards The primary issue in these appeals is the classification of educational audio picture cards imported by the appellant. The appellant, a small-scale manufacturer of electronic teaching aids, imported a product called "Talk N' Teach," which comprises a small machine and complementary cards. The first consignment was cleared under Heading 49.03 of the Customs Tariff Act without any Customs duty. However, the second consignment was classified under Tariff sub-heading 4911.99 by both the Assistant Collector and the Collector (Appeals), rejecting the appellant's claim for reassessment under Heading 49.03 as "Children's picture, drawing or colouring books." The third consignment was classified by the Assistant Collector under sub-heading 8524.21, while the Collector (Appeals) re-classified them under heading 8524.90 as 'other recorded phenomena.' Issue 2: Determination of Applicable Customs Tariff Heading The appellant argued that the product is a collection of educational visual cards, termed 'flash cards,' containing a pictorial depiction in alphabetical order. Each card contains a magnetic tape running along the length of the card below the picture and lettering, making it an audio-visual card when inserted in the recorder. The appellant contended that the presence of magnetic tape does not alter the basic character and purpose of the cards as educational picture cards. The cards should be classified under Chapter 49 as products of the printing industry, either under Heading 49.01 as printed books or 49.03 as Children's picture books. The Department argued that the attraction of the product is the voice and not the picture, classifying it under sub-heading 8524.90 as the audio effect gives the product its essential character. Judgment Analysis: Chapter 85 Classification The Assistant Collector initially classified the goods under Heading 8524.21 as recorded media - magnetic tape of a width not exceeding 4 mm. The Collector (Appeals) reclassified them under sub-heading 8524.90 for the reason that recorded magnetic tape forms the essential feature of the composite article. However, the Tribunal disagreed, stating that the picture and lettering on the cards form the inherent characteristics. The cards are of high educational value, and even without the audio-tape, they would still have intrinsic educative value. Therefore, the goods do not fall within the purview of Chapter 85 of the Customs Tariff. Chapter 49 Classification Having ruled out classification under Chapter 85, the Tribunal examined whether the imported goods fall under Heading 49.01, 49.03, or 4911.99. The Collector (Appeals) had ruled out classification under Heading 49.03 for the sole reason that the goods are not compiled in book form. The Tribunal found this reasoning incorrect, noting that even loose sheets of paper are recognized by trade and commerce to be "books." The goods imported are recognized as "books" in the international market and are described as such by the appellant's suppliers. The Tribunal concluded that the goods are books covered by Chapter 49 as products of the printing industry. Specific vs. General Description The Tribunal noted that Rule 3(c) of the Interpretative Rules, which the lower appellate authority relied upon, is inapplicable as it can only be resorted to when there are two competing entries. Instead, Rule 3(a) sets out that where goods can be classified under more than one Tariff heading, the specific description should be preferred. In this case, the goods fall under the more specific description in Tariff Heading 49.03, which covers "children's picture, drawing or colouring books." The imported picture books are clearly compiled for the interest and amusement of children and for guidance in their first steps of primary education, with the pictures forming the principal interest. Conclusion: The Tribunal concluded that the goods imported are correctly classifiable under Heading 49.03 of the Customs Tariff. Consequently, the appeals were allowed.
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