Per V.K. Ashtana :

This is a Revenue appeal against the order in Appeal No. 68/89 (B) dated 21.3.89 wherein video decks manufactured by the current respondents have been held classifiable under sub heading 8522 of the Central Excise Tariff Act. The Revenue appeal is on the ground that the said video decks should be classified under sub-heading 8521.00 inasmuch as they have already acquired all the essential characteristics of V.C.R. in terms of Rule 2 (a) of the Rules of interpretation of the said Act.

2. Heard Smt. Aruna N. Gupta, learned JDR for the Revenue and Shri G. Sampath, learned Counsel for the respondents.

3. Learned JDR submits that merely because a few items or accessories have not been added to the video deck it does not mean it has not acquired the essential characteristics of VCR. She reiterates the grounds of appeal.

4. Learned Counsel referred to the technical note prepared by one NP Ramesh, Senior Manager, R&D and also the two photographs. He submits that the photograph labelled as exhibit I shows the condition in which the said video deck is cleared from the factory. The second photo which is labelled as exhibit II shows additional items which are required to be affixed to this deck before the buyers thereof buy the deck for manufacture of the normal Video Cassette Recorder (VCR) as known in the market. He further submitted that as is evident from the said technical write-up three major components or sub-assemblies are required to be added to the video deck before it can perform all the basic functions of a VCR. These are (i) Tuner Block (ii) Tuning & Timer Micro Controller Block (TN-2) and (iii) Memory & Display Block (TN-3). The learned Counsel therefore submitted that deck is merely sub-assembly of the VCR and it is purchased only by other manufacturers of complete VCR as sub-assemblies/parts thereof. Since there is specific tariff heading covering sub-assemblies/parts under the Central Excise Tariff, therefore, the learned Collector (Appeals) has rightly held that it would be classifiable therein as interpretative rules cannot take away the meaning of the clearly applicable sub-heading in the tariff. The said interpretative rule is only used for interpretation of any sub-heading when no clear sub-heading applies. He, therefore, submits that there is no merit in theRevenue appeal and therefore, the same needs to be dismissed.

5. We have carefully considered the rival submissions and also the records of the case. We find that the technical literature produced before us as well as the photographs clearly show that video deck is not a complete VCR. At best it is only part or sub-assembly thereof inasmuch as that it cannot be operated upon in the absence of control panel. In the absence of tuner block no signal can be tuned effectively for recording a tape. Similarly timer controller block being absent i.e. another essential feature of a VCR known in the market, it cannot be said to operate at a pre-fixed time. From the photograph at exhibit I, it is clearly seen that there are gaps in the chassis for affixing these three modules by the purchaser. It is also seen that deck is not even enclosed in a metallic cover and is totally exposed to the environment. No VCR, even if it is held to be leading accessories, can operate in such exposed condition. Further we find that there being no display of power control switches with respect to power off, on, stop/eject, rewind forward and rewind reverse and play etc., the deck as it is cleared can just not be used for either playing or recording with respect to VCR. In view of the facts found by us it is clear that the said video deck has not acquired the essential characteristics of VCR. Hence in our considered opinion the interpretative rule 2 (a) cannot apply to the facts of this case. On the contrary, the product as it is cleared, is basically a component part of VCR and has therefore been rightly classified under sub-heading 8522.00 in the order in appeal impugned. W