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2010 (7) Supreme 1006
SUPREME COURT OF INDIA
D.K. Jain and H.L. Dattu, JJ.
M/s. Xerox India Ltd. — Appellant
versus
Commissioner of Customs, Mumbai — Respondent
Civil Appeal No. 1583 of 2003
Decided on : 22-11-2010
Facts of the Case :
Issue in consideration in present appeal was whether the Multi-Functional Machines imported by the appellants fall under Chapter Heading 8479.89 (Residual Heading) as claimed by Revenue or under Chapter Heading 8471.60, as claimed by the appellants, under Customs Tariff Act.
Findings of the Court :
Held that there was no dispute that 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 requirement of chapter note 5(B), as it is to be used principally in ADPM, it is connectable to the Central Processing Unit, and it is able to accept data in a form (codes or signals) which can be used by the system. Further, there would be no application of chapter note 5(E) as the Multi-Functional Machines are presented independently. Moreover, since predominant components are relating to printing function, chapter note 5(D) also becomes relevant which includes printers under heading 84.71.Based on the nature of the functions they perform, the Multi- Functional Machines would serve as input and output devices of an ADPM(computer) and thus serve as unit of an ADPM, which on a reading of chapter note 5(C), clearly classifies them as falling under heading 84.71.60 of the Act-Contention of respondent that no one function of the Multi-Functional Machines, even printing, can be seen as predominant held incorrect on facts.Hence held that correct classification forimported Multi-Functional Machines involved in this case, namely models Xerox Regal 5799, Xerox Workcentre XD 100 and Xerox Workcentre XD 155df would be under Customs Tariff Chapter heading 84.71.60. Impugned order passed by the Tribunal set aside. Appeal allowed.
Result : Appeal allowed.
JUDGMENT
H.L. Dattu, J.
1) In this appeal, the only question, that arises for our consideration and decision is, whether the Multi-Functional Machines imported by the appellants fall under Chapter Heading 8479.89 (Residual Heading) as claimed by the Revenue or under Chapter Heading 8471.60, as claimed by the appellants, under Customs Tariff Act (hereinafter referred to as, “the Act”).
2) The appellants are engaged in the trading of High Technology reproduction and Duplicating 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 been preferred under Section 130E of the Customs Act, 1962.
3) To put it broadly, the controversy between the appellants and the Revenue is with regard to the classification of Xerox Regal 5799, Xerox Work Centre XD100 and Xerox Work Centre XD155df which, according to the appellants, are Multi-Functional Machines performing the functions of printers, fax machine, copier and/or scanner and therefore, requires to be classified as Printers in Automatic Inter Processing Machine (ADD) under Chapter Heading 8471.60 and the view of the authorities under the Act and the Tribunal is that the aforesaid machines require to be classified under Chapter Heading 8479.89 (Residual Heading).
4) Before examining this question, the relevant Headings and sub-Headings may be noted. Heading 84.71 and 84.79 of the Customs Tariff Act at the material point of time stood as under:
“84.71 Automatic data processing machines and units thereof; magnetic or optical readers, machines for transcribing data on to data media in coded form and machines for processing such data not elsewhere specified or included.” “8471.60. Inputs or output units whether or not containing storage units in the same housing.” “84.79: Machines and mechanical appliances having individual functions not specified or included elsewhere in this Chapter.”
5) The Deputy Commissioner of Customs, while holding that the imported machines require to be classified under the residual heading, was of the view that the digital printer was not a unit of the automatic data processing unit as such. To qualify as a unit of an automatic data processing machine, it should be able to work only with a computer as per Chapter Note 5B. The moment it is able to perform independently of a computer, its claim to be a unit of the computer ceased to exist. Merely working in conjunction with a computer did not bestow the status of a unit of the computer as a machine. Since digital printer was not classifiable under any specific heading, the same requires to be classified under residual heading. It is also observed that the machine is capable of functioning as a stand alone digital copier even without a computer and therefore, in terms of note 5(E) of Chapter 84 of the Act, the imported machine cannot be classified under heading 84.71. The Appellate Authority while deciding the
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