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TMI Blog2010 (11) TMI 20X X X X Extracts X X X X X X X X Extracts X X X X ..... uplicating machines, printers and Multi-Functional Machines capable of discharging number of functions. During the period March, September and November, 1999, the appellants imported Xerox Regal 5799, Xerox Work Centre XD100 and Xerox work Centre XD 155df respectively and filed Bills of Entry before the Customs Officer. The appellants sought classification of these imported machines under Sub-Heading 8471.60 of the Act. The Deputy Commissioner of Customs, vide his order dated 22.02.2000 classified the imported machines under Chapter Heading 8479.89 (Residual Heading) of the Act. Being aggrieved by the same, the appellants filed an appeal before the Commissioner of Customs (Appeals), Mumbai, who by his order dated 27.02.2000, rejected the appeal and thereby confirmed the order passed by the Deputy Commissioner of Customs. The appellants questioned the said order before Customs, Excise and Gold (Control) Appellate Tribunal, New Delhi (hereinafter referred to as, "the Tribunal"). The Tribunal, by its order dated 5.11.2002, has rejected the appeal and has confirmed the order passed by the First Appellate Authority. Aggrieved by the order passed by the Tribunal, the present appeal has b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ding and conclusion reached by Deputy Commissioner of Customs. The Tribunal, while accepting the view of the authorities under the Act, inter-alia, has observed that the machines in dispute are Multi-Functional Machines based on digital technology and performs the functions of a printer, scanner and digital copier and the said machines are not solely or principally used in an automatic data processing machine and further observed that the earlier decisions rendered by the Tribunal in the case of MX Software Services Ltd. v. Commissioner of Customs, Mumbai 2001 (131) ELT 422 (Tri-Del) is clearly distinguishable on facts. 6) Sri V. Lakshmi Kumaran, learned counsel appearing for the appellants, has argued in great detail for the classification of imported machines - Digital Printer under heading 84.71.60. In the course of his detailed submissions, he has explained that a printer performs the function of printing documents, which works alongside a computer. The printing is carried out by the computer giving orders in the form of a digital signal, which is transmitted through wires, converted into a readable language, and then printed. He has gone on to explain the function of a scann ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r notes 5(B)(b) and 5(B)(c) as they are connected to a Central Processing Unit and can accept and deliver recognizable data. Further, it is argued that the term "principally" in chapter note 5(B)(a) implies "meant for" and it is clear that the Multi-Functional Machines in the present case are meant to be used with an ADPM, as neither the printing nor the scanning function can be performed without an ADPM, and little purpose will be served to the consumers if they do not perform these essential functions. Thus, there has been an erroneous finding by the Tribunal that chapter note 5(B)(a) does not apply and that the Multi-Functional Machines are not qualifiable under chapter note 5(B). As chapter note 5(B) is to be read with chapter note 5(E), he points out that the wording of chapter note 5(E) is "machines performing a specific function other than data processing and incorporating or working in conjunction with an automatic data processing machine", which does not apply as neither are the Multi-Functional Machines in the case incorporating an ADPM, nor are they presented with an ADPM, but rather are presented independently. Therefore, he submits that chapter note 5(E) has no applica ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re not printer simpliciter attached to a computer, but are capable of performing multifunction input and output facility, and, therefore, it is difficult to say that the machine is performing only one function, i.e. printing. His argument is that no single function of the machines, printing or otherwise, can be said to be predominant and the device/system in the machine has variable number of separate units capable of performing separate function. He also submitted that on a reading of chapter notes 5(B)(b), 5(B)(c) with 5(E), only a printer, keyboard, x-y co-ordinate input devices and disk storage unit, which satisfy conditions of Notes 5(B)(b) and 5(B)(c), are classifiable under heading 84.71.60. The rest including the Multi- Functional Machines in this case, as per Note 5(E), has to be classified under the residuary heading of 84.79.89. 9) Chapter note 5 of Chapter 84, during the relevant period, was as under:- "5(A) For the purposes of heading no. 84.71, the expression "automatic data processing machines" means: (a) Digital machines, capable of (1) storing the processing programme or programmes and at least the data immediately necessary for the execution of the programme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and goods put up in sets for retail sale, which cannot be classified by reference to (a), shall be classified as if they consisted of the material or component which gives them their essential character, insofar as this criterion is applicable." (emphasis supplied). 12) In addition, Note 3 of Section XVI (which includes both Chapter 84 and Chapter 85) reads as follows: "Unless the context otherwise requires, composite machines consisting of two or more machines fitted together to form a whole and other machines designed for the purpose of performing two or more complementary or alternative functions are to be classified as if consisting only of that component or as being that machine which performs the principal function." (emphasis supplied). 13) It is not in dispute that the Multi-Functional Machines in question, Xerox Regal 5799 has about 85% of the its total parts and components along with manufacturing cost allocated to printing, as does 74% of the Xerox XD155df model. This clearly shows that the printing function emerges as the principal function and gives the Multi-Functional Machines its essential character. Having such a nature, it also clearly meets the three-fold ..... X X X X Extracts X X X X X X X X Extracts X X X X
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