Commissioner of Customs Vs Neotric Informatique Ltd. (CESTAT Chennai)
Introduction: In the case of Commissioner of Customs vs. Neotric Informatique Ltd., the issue at hand was the classification and eligibility for customs duty exemption of “External Hard Disc Drives” imported by the respondent. The dispute revolved around the appropriate tariff heading and the application of Notification No. 12/2012-CE dated 17.03.2012.
Analysis: The respondent imported “External Hard Disc Drives” and claimed the benefit of customs duty exemption under Notification No. 12/2012-CE. However, the Department disputed the assessment and claimed that the goods should be classified under a different tariff heading, which would render them ineligible for the exemption. The key point of contention was whether the hard disc drives were to be considered “removable or exchangeable disk drives,” affecting their eligibility for the exemption.
The Tribunal considered the classification issue and the eligibility of the goods for the exemption. It was noted that the exemption notification specified tariff headings up to six digits, covering both hard disc drives and removable or exchangeable disk drives. The description in the notification mentioned only “hard disk drives” without specifying whether they were “external” or “internal.”
The Tribunal examined the technical specifications and samples of the imported goods, ultimately agreeing with the Commissioner (Appeals) that the goods fell under CTH 84717020 and were eligible for the concessional rate of customs duty as per the notification. They were considered portable hard disc drives meant for external use with computers or laptops as plug-in devices.
Conclusion: The CESTAT Chennai upheld the decision that “External Hard Disc Drives” were eligible for customs duty exemption under Notification No. 12/2012-CE at Sl. No. 255, classifying them under CTH 84717020. The Tribunal referred to the technical opinion of the Ministry of Communication and Information Technology and the factual findings of the impugned order in supporting its decision. The appeal filed by the Department was dismissed, affirming the eligibility of the goods for customs duty exemption.
FULL TEXT OF THE CESTAT CHENNAI ORDER
1. Brief facts are that the respondent imported „External Hard Disc Drives‟ under the cover of Bills of Entry and claimed the benefit of Notification No. 12/2012- CE dated 01.03.2012 by classifying the goods under CTH 84717020. Based on the reference from the DRI, Mumbai, these Bills of Entry were assessed on merits by classifying the goods under CTH 84717030 and denying the benefit of the notification. The respondent disputed the assessment and paid the duty under protest. After due process of law, the original authority held that as per the Central Excise Tariff Act, Hard Disc Drives and removable or exchangeable Disc Drives are different items and to be classified under CTH 84717020 and 85471730 respectively. The impugned goods which are external hard disks drives which are removable is not eligible for the benefit of the Notification No. 12/2012-CE dated 17.03.2012 at Sl. No. 255. The respondent / importer filed an appeal before the Commissioner (Appeals) who vide order impugned herein set aside the order and held that the goods are rightly classifiable under CTH 84717020 and that the appellant is eligible for the notification benefit. Aggrieved, the Department is now before the Tribunal.
2. The Ld. Authorised Representative Shri Harendra Singh Pal argued for the Department. It is submitted that the external hard disc drives are essentially presented and marketed as „portable drives‟. In addition to the features of portability, these external hard disc drives are different from internal hard disc drives in as much, as these external drives also encapsulate additional electronic circuits and connection interfaces that render them usable as a „removable disc drive‟. These goods are different from normal hard disc drives. It is submitted that the Commissioner (Appeals) has erred in setting aside the order passed by the adjudicating authority and holding that the importer / respondent is eligible for the benefit of Notification No. 12/2012-CE dated 17.03.2012.
3. The Ld. counsel Shri L. Gokulraj appeared and argued for the appellant. It is submitted that the issue stands covered by the decision of the Tribunal in the case of Commissioner of Customs, New Delhi Vs. Supertron Electronics P. Ltd. [2017 (357) ELT 401 (Tri. Del.)] which has been affirmed by the Hon’ble Apex Court as reported in [2018 (360) ELT A325 (S.C.)]. The Ld. counsel submitted that the Tribunal while passing the decision has taken note of the clarification issued by Ministry of Communications and Information Technology, vide Office Memorandum dated 05.06.2013. The said decision was followed by CESTAT Mumbai in the case of Lenovo India Pvt. Ltd. Vs. Principal Commissioner of Customs (Imports) vide Final Order No. A/86055-86056/2022 dated 09.11.2022. The Ld. counsel prayed that the appeal may be dismissed.
4. Heard both sides.
5.1 The issue is with regard to the classification of the hard disc drives and the eligibility of Notification No. 12/2012-CE dated 17.03.2012 Sl. No. 255. The relevant part of the Notification is reproduced as under:-
