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CUSTOMS, EXCISE AND GOLD (CONTROL) APPELLATE TRIBUNAL, MADRAS
V.P. Gulati, T.P. Nambiar, JJ.
Indochem Electronics Ltd. -Appellant
Versus
Commissioner of Central Excise, Chennai -Respondent
Order No. 1800/97 Appeal No. E/474/95, 1800 of 1997, E/474 of 1995
Decided On : 10-07-1997
Maithuli,Rama Rao
Per Shri V.P. Gulati :
The issue in the appeal relates to the classification of certain items which have been held by the learned lower authority as falling under tariff heading 84.73.
2. The appellants have claimed the classification of same under tariff heading 84.71. The goods in question as has been explained by the learned advocate based on the write-up which is produced today are in the nature of "add-on cards and Mother Boards".
3. The learned advocate has pleaded that the learned lower authority has not appreciated the import of chapter note 5 (b) of chapter 84. For convenience of reference, chapter Note 5 is reproduced below :-
5. (a) For the purposes of heading No. 84.71, the expression 'automatic data processing machines' means:-
(i) Digital machines, capable of (1) storing the processing programme of programmes and at least the data immediately necessary for the execution of the programme; (2) being freely programmed in accordance with the requirements of the user; (3) performing arithmetical computations specified by the user; and (4) executing, without human intervention, a processing programme which requires them to modify their execution, by logical decision during the processing run;
(ii) Analogue machines capable of simulating mathematical models and comprising at least: analogue elements, control elements and programming elements;
(iii) Hybrid machines consisting of either a digital machine with the analogue elements or an analogue machine with digital elements.
(b) Automatic data processing machines may be in the form of systems consisting of a variable number of separately-housed units. A unit is to be regarded as being a part of the complete system if it meets all the following conditions:-
(i) it is connectable to the central processing unit either directly or through one or more other units;
(ii) it is specifically designed as part of such a system [it must, in particular, unless it is a power supply unit, be able to accept or deliver data in a form (code or signals) which can be used by the system].
Such units presented separately are also to be classified in heading No. 84.71. Heading No. 84.71 does not cover machines incorporating or working in conjunction with an automatic data processing machine and performing a specific function. Such machines are classified in the headings appropriate to their respective functions or, failing that, in residual headings.
4. She has referred to chapter note 5b where under it is clearly provided that a system is formed by use of certain elements the system will fall under tariff heading 84.71.
5. She has pleaded that the cards in question provided functional role and without these, the individual units and machines will not give the desired output for the system to perform. She has pleaded that these goods could be treated as individual units of the system and therefore the same should be classified under 84.71.
6. The learned JDR for the department has pleaded that scope of tariff heading 84.71 covers such of those machines and the combination of those machines which have capable of receiving certain inputs, processing the same and giving the desired output.
7. He has pleaded the cards in question and Mother Boards by themselves cannot be considered as individually functional for use as such for getting desired output out of certain inputs.
8. He has pleaded these have to be used as parts of individual machines wherein these play the role and these by themselves cannot be considered as individual units falling under 84.71.
9. We have considered the pleas made by both the sides. We observe so far as the Tariff heading 84.71, the same reads as under :-
"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".
10. A reading of this shows that the units which are covered thereunder have to be in the nature of machines an
