1998 (3) TMI 267 - AT - Central Excise

Summary

Issues:
Classification of floppy diskettes under Customs Tariff, Refund claim rejection, Appropriate heading for classification, Interpretation of relevant headings, Comparison with previous judgments.

Classification of floppy diskettes under Customs Tariff:
The appeal was filed by the department against the order of the Collector of Customs (Appeals), New Delhi regarding the classification of floppy diskettes imported by the respondent. The respondent had claimed that the floppy diskettes should be classified under a different heading than the one used by Delhi Customs. The A.C. (Refunds) rejected the claim stating that the diskettes were computer software and correctly classified under a specific heading. The Collector of Customs, New Delhi upheld this decision, emphasizing that the imported items were rightly classified under a particular heading related to computer parts and accessories.

Refund claim rejection:
The A.C. (Refunds) rejected the refund claim for the floppy diskettes based on the classification as computer software under a specific heading. The Collector of Customs, New Delhi also supported this decision, highlighting that the classification under the chosen heading was appropriate and advising the respondent to appeal if still aggrieved by the decision.

Appropriate heading for classification:
The respondents had initially classified the floppy diskettes under a specific heading under the Customs Tariff. The Tribunal observed that since the diskettes were parts/accessories of computers, they should be classified under a different heading more suitable for such items. The relevant headings were compared to determine the correct classification, emphasizing that the diskettes were not parts/accessories of musical instruments but rather suitable for use with automatic data processing machines.

Interpretation of relevant headings:
The Tribunal analyzed the relevant headings under which the floppy diskettes could be classified. It was noted that the heading covering musical instruments and recording media was not appropriate for unrecorded diskettes, which led to the conclusion that the items should be classified under a heading related to computer parts and accessories.

Comparison with previous judgments:
The Tribunal referred to a previous judgment by the Hon'ble Bombay High Court regarding the classification of diskettes. The High Court's decision highlighted that diskettes should not be classified under a specific heading related to machinery or mechanical appliances, supporting the Tribunal's stance that the floppy diskettes were more suited for classification under a heading concerning computer parts and accessories. The Tribunal rejected the department's plea for classification under a different heading based on the analysis and comparison with the previous judgment.