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Issues Involved: Classification of imported goods under different headings of the Customs Tariff Act, 1975.
Summary: The case involved the classification of imported goods, specifically data processing machines and software, under different headings of the Customs Tariff Act. The appellants imported various computer-related items, including a computer system with software recorded on a hard disk. The dispute centered around whether the hard disk with software should be classified under Heading 84.71 as part of the machine or under Heading 85.24 as software. During the proceedings, references were made to various judgments of the Supreme Court and the Tribunal regarding the classification of computer hardware and software as distinct entities. The Commissioner of Customs had classified the software under Heading 8471.41 and imposed penalties on the importers. The Tribunal examined the relevant tariff entries and notes, including Chapter Note 5 to Chapter 84 and Chapter Note 6 under Chapter 85. It was observed that the hard disk with software recorded thereupon should be classified under Heading 85.24, even when assembled into the computer system. The Tribunal found that the hard disk merited the benefit of an exemption notification and allowed the appeal, setting aside the impugned order. In conclusion, the Tribunal determined that the hard disk with software recorded deserved classification under Heading 85.24, contrary to the Commissioner's decision, and granted consequential relief to the importers.
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