1998 (1) TMI 258 - AT - Customs

Disk drives with controller not simple disk drives - Benefit of Exemption Notification No. 281/84-Cus. not available.

Summary

Issues:
Interpretation of Notification No. 281/84-Cus. regarding concessional duty rate for Winchester Disk Drives with Controller.

Analysis:
The appeal was filed against an order granting the benefit of Notification No. 281/84 to Winchester Disk Drives with Controller imported by the appellant. The appellant argued that the controller performs a distinct function from the disk drive and should be eligible for the concessional duty rate. The respondents contended that the controller is merely a Printed Circuit Board connecting the disk drive to the CPU, making the entire unit a disk drive only. They cited legal precedents to support their position that the exemption cannot be denied based on additional functions the imported goods can perform.

The Tribunal noted that the notification provides concessional duty only for Winchester Disk Drives, not drives with controllers. Legal precedents cited by the respondents were distinguished as they involved different facts. The Tribunal highlighted that the case in question involved the import of Winchester Disk Drives with Controllers, not standalone drives. The Tribunal agreed with the Revenue's argument that the addition of a controller alters the character of the disk drive, taking it out of the coverage of the notification. The certificate from the Department of Electronics covering magnetic disks did not apply to disk drives with controllers. The Tribunal concluded that since the imported goods were disk drives with controllers, not simple disk drives, the benefit of the notification could not be extended to them.

In light of the above analysis and the previous Tribunal decision on a similar case, the impugned order was set aside, and the appeal was allowed.