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TMI Blog2005 (7) TMI 386X X X X Extracts X X X X X X X X Extracts X X X X ..... are common. The question to be decided is correct classification of Kernel imported by parties. The parties claim classification of the product under Chapter sub heading 8473.30 of the Customs Tariff as parts and accessories of goods falling under CH 84.71. But, the Revenue holds that the correct classification would be under 8471.91 as a Digital Processing Unit . 2. The kernel consists of a power supply unit, motherboard and other connectors housed inside a metal box. In order to make it a full-fledged computer other items like RAM (Random Access Memory), Floppy disk drive (FDD) or other storage units (Hard Disk Drive) are required. There is value addition to the extent of 42% to 92% between the kernel and the automatic data processin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The Commissioner based his conclusion on the following basis : (a) Section Note 4 to Section XVI of the Customs Tariff; (b) The test of essential character contained in Rule 2(a) of HSN Explanatory Notes; (c) The opinion dated 6-12-1994 given by the Joint Director, STPI; (d) The statements of the officials of the appellants; (e) The dictionary meanings of Central Processing Unit and Mother Board. (ii) The Advocate explained that each of the conclusions reached by the Commissioner is incorrect. Section Note 4 to Section XVI would come into play only if a machine consisting of individual components whether interconnected or not is presented as a unit for assessment. In this case the kernel merely consis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arcel of the kernels/system boxes on the ground that they came along with the said kernels/system boxes, is prima facie illegal in as much as the revision in classification of these items is beyond the order of the Tribunal and in the light of the fact that the Revenue had not filed any appeal against the classification held by the Commissioner of Customs in the original proceedings. The demand to the extent of Rs. 1,39,284/- is the additional liability fastened on the appellants which is beyond the order of the Tribunal and therefore illegal. 5. We have gone through the records of the case carefully. It is seen that originally Revenue was classifying the item under 8473.30 only. When the rate of duty changed, the department switched over ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... its/input-output units and storage units. It makes it mandatory that these machines in the same housing should have an input/output unit, in addition to central processing unit or memory unit. Section 84.73 provides for parts and accessories (other than covers carrying cases) suitable for use solely or principally with the machines heading No. 84.71. The above three sub-assemblies though put in a single box are parts and accessories of the main computer system. Therefore, in our opinion the three sub-assemblies can be classified under Chapter 8473.30 of CTA. This issues with the approval of Shri K. Roy Paul, Joint Secretary, Department of Electronics. Yours faithfully, Sd/- (R.C. Sachdeva) ADDITIONAL DIRECTOR ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3.30 . 3. The matter has been re-examined by the Board and it is reiterated that the goods in question will still be classifiable as parts of computer only under Sub-heading 8473.30 and will be eligible for exemption under notification No. 11/97-Cus., dated 1-3-1997 and notification No. 23/98-Cus., dated 23-6-1998, as the case may be, as the populated PCBs fitted in the inner shell loses its identity as PPCB. Yours faithfully, Sd/- (O.P. Khanduja) SR. Technical Officer (Tariff Unit) 6. We also hold the view that one should not jump to interpretative Rules 2(a) when the classification can be done in terms of Section and Chapter Notes. Moreover, without RAM, memory module and storage devices, the impugned goo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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