1999 (5) TMI 286 - AT - Customs

Summary

Issues: Classification of imported goods under Customs Tariff Act, 1975 and applicability of Notification No. 59/95.

Analysis:

1. Classification of Goods: The appeal was filed against the order-in-original by the Commissioner of Customs, Delhi, regarding the classification of imported goods described as Global Sprint Fax (GSF) software. The appellants claimed classification under sub-heading 8524 of the Customs Tariff Act, 1975, and the benefit of Notification No. 59/95 for the software.

2. Contentions of the Appellants: The appellants argued that the goods were a combination of a hard disk drive and software loaded on it. They contended that the value of the software was more than the hard disk drive, hence should be classified under the heading of software. They relied on Note 6 to Chapter 85 of the Customs Tariff to support their classification under Chapter 85.

3. Revenue's Argument: The Revenue argued that the classification should be based on the rules of interpretation to the tariff and the relevant chapter, not on the value of the goods. They asserted that the hard disk drive is a peripheral device of an automatic data processing machine, thus classifiable under sub-heading 8471 of the Customs Tariff.

4. Tribunal's Decision: The Tribunal examined the definitions under Chapter 84 regarding automatic data processing machines and noted that the hard disk drive, as a storage unit, falls under Heading 84.71 of the Customs Tariff. The Tribunal found that when software is loaded on the hard disk drive, it becomes an integral part of the drive, not a separate entity. The Tribunal rejected the appellants' arguments and upheld the classification under Heading 84.71.

5. Precedent: The Tribunal distinguished the appellants' reliance on a Supreme Court decision regarding the value of software sold with computers, stating that it was not applicable to the present case where the hard disk drive was imported separately and assessed under the Customs Tariff for customs duty purposes.

6. Conclusion: After considering the arguments from both sides, the Tribunal found no merit in the appeal and rejected it based on the classification of the imported goods as a hard disk drive under Heading 84.71 of the Customs Tariff Act, 1975.

This detailed analysis of the legal judgment provides a comprehensive understanding of the issues involved, the arguments presented by both parties, the Tribunal's decision, and the relevant legal principles applied in determining the classification of the imported goods under the Customs Tariff Act, 1975.