1999 (6) TMI 192 - AT - Customs

Summary

Issues Involved:
1. Classification of imported goods.
2. Requirement of an Import Licence.
3. Validity of clarification issued by JDGFT.
4. Applicability of Accessories Rules, 1963.

Summary:

1. Classification of Imported Goods:
The appellants imported DTS-6D Sound Processor System and CP-65 System, which were classified under sub-heading 8519.99 of the Customs Tariff by the Department, requiring an Import Licence as they were considered consumer goods. The appellants contended that the goods should fall under 8543.89 or 9007.92, and the corresponding ITC HSN classification being 900711.02, thus not requiring a licence. The Tribunal found that the imported items do not function independently and are sub-systems of a cinematographic projector, classifiable under Heading No. 9007.92 of CTA, 1975, and under Heading No. 900711.02 of the ITC (HS).

2. Requirement of an Import Licence:
The Tribunal concluded that the imported goods are not consumer goods as they cannot reproduce sound independently and are designed to work in conjunction with a cinematographic projector. Therefore, they fall under the category of capital goods and do not require an Import Licence.

3. Validity of Clarification Issued by JDGFT:
The Tribunal accepted the clarification issued by the Joint Director General of Foreign Trade (JDGFT) that the items imported are cinematographic sound reproducing apparatus for projectors, covered under sub-heading 90071102 of ITC (HS) classification. The Tribunal held that the clarification from the JDGFT is valid and binding on Customs authorities, rejecting the Department's argument that it needed revalidation from the DGFT.

4. Applicability of Accessories Rules, 1963:
The Tribunal found that the Accessories Rules, 1963, under the Customs Act, are not applicable in this case as the rules pertain to the computation of customs duty and not to the interpretation of ITC Policy. The imported items are not mere accessories but sub-systems that significantly change the performance of the cinematographic projector.

Conclusion:
The Tribunal set aside the order-in-appeal, allowing the appeal with consequential relief, holding that the imported goods are sub-systems of a cinematographic projector, not consumer goods, and do not require an Import Licence.