Nikon Camera Model No. N2120 with standard accessories classifiable under Sub-heading 85258900: CAAR

In re Nikon India Pvt Ltd. (CAAR Delhi)

CAAR held that Nikon Camera Model No. N2120 with standard accessories proposed to be imported by the applicant is correctly classifiable under Sub-heading 85258900 of the First Schedule to Customs Tariff Act, 1975. Also, in terms of, “The Accessories (Condition) Rules, 1963, the said camera along with the standard accessory, if presented together shall be chargeable under the sub heading 85258900. However, any item/accessory, optional in nature, would merit classification in the tariff heading appropriate to it. The benefit vide S. No. 502 of Notification No. 50/2017-Cus. Dated 30.06.2017 is available on import of the aforesaid Nikon Camera Model No. N2120.

FULL TEXT OF THE ORDER OF CUSTOMS AUTHORITY OF ADVANCE RULING, DELHI

M/s Nikon India Pvt. Ltd., Plot No.-71, Sector-32, Institutional Area, Gurugram, Haryana-122001 having IEC No.0507023927 and PAN-AACCN5100F (applicant, in short) filed an application dated 07.05.2023 before the Customs Authority for Advance Rulings, New Delhi (CAAR, in short), seeking advance ruling under section 28-H of the Customs Act, 1962. The application was accordingly registered under serial number 11/2023 dated 08.05.2023.

2. The applicant, vide the aforesaid application, has sought ruling from CAAR, New Delhi on the question of classification and applicability’ of notification. The applicant has proposed to import Nikon Camera Model No. N2120 (subject goods, in short) as a complete product [i.e. camera body, lens (optional), battery’ and battery charger, Adapter etc.] and stated that, the subject goods have a design concept that is based on the traditional still image cameras with interchangeable lens and a viewfinder along with the shutter release button; the subject goods have a high resolution (45.7million) sensor (with a sensor size of this camera is 35.9mm x 23.9mm); these design elements make the subject goods more suited for still photography; the subject goods in addition to the capturing still images are able to record video for more than 30 minutes in a single sequence, however, maximum video recording capability’ is subject to temperature inside the camera caused by shooting modes, connectivity’ and other usages and storage space available in the internal/external memory. As regards other features, it is also stated inter-alia that, the subject goods do not host any dedicated heat management module in line with its design language; these are made compact and lightweight due to the mirrorless technology it uses; the grip design used in the subject goods is a notable feature for still image cameras; these goods support almost all the essential and extended range of accessories including, but not limited to, speedlights, flash triggers, battery packs, remote controls and other still photographs- related accessories.

3. The questions on which advance ruling has been sought are as follows:-

(a) Whether the subject goods proposed to be imported by the applicant are classifiable under Custom Tariff item 85258900 of the Customs Tariff?

(b) If the answer to question (a) is affirmative, whether the applicant can claim benefit under S. No. 502 of Notification No. 50/2017-Cus. dated 30.06.2017?

(c) If the answer to the question (a) and/ or (b) is in the negative, then, what is the appropriate classification of subject goods when imported along with accessories under the Customs Tariff and/or effective rate of duty under such appropriate classification?

4.1 The applicant has also stated that, they had imported the subject goods earlier for the limited purposes of BIS testing, certification and demo; they had classified the subject goods under Sub-heading 85258900 of the First Schedule to the Customs Tariff Act 1975 and claimed exemption from payment of Customs duties under serial number 502 of Notification No. 50/2017-Cus. dated 30.06.2017; although, the definition of advance ruling, as staled under Section 28E(b), includes questions raised in respect of goods prior to its importation, the applicant submits that such past imports of the subject goods, prior to the filing of this application, does not affect the eligibility of the applicant in terms of the section 28H of the Customs Act, 1962; moreover, the activity of commercial imports of the subject goods by the applicant still remains a ‘proposed activity, past imports of goods do not disqualify the applicant from seeking an advance ruling application pertaining to permissible questions on import of such goods, the same was held by the Hon’ble Delhi High Court in the case of D.R.I. vs. M/s Spraytec India Ltd., 2023/DHC/000367 wherein the relevant extract of the judgement states, In order for a question to be considered as pending before any officer of customs, it would be necessary for the question to be raised in any notice enabling the assessee to respond to the said issue. It is only after this stage that it would be necessary for the officer of customs to render its decision on the question. Merely because an officer of customs contemplates that a question may arise, does not mean that the question is pending consideration. For a question to be stated to be pending, the concerned officer must formally set forth the same for the assessee to contest the same. Any preliminary exercise done by an officer of customs, to consider whether any question for consideration arises, would not preclude the CAAR from giving its advance ruling on that question. The possibility that a question would arise for consideration of a customs officer, appellate tribunal or court, is not a ground contemplated under Clause (a) of the proviso to Section 28-1(2) of the Customs Act. in light of the above, the applicant is satisfying the afore-stated conditions; the applicant in the present case proposes to commercially import subject goods for sale in the Indian market; for the purpose of clearing the subject goods for domestic consumption, it is essential for the applicant to identify the correct classification under which such goods would be cleared and the applicable rate of customs duty thereon; therefore, it flows that in the present case, the applicant satisfies all the three-criteria required for filing the application for advance ruling, namely:-

(a) The applicant possesses a valid IEC number 0507023927;

(b) The application for advance ruling is in relation to clause (a) & (b) of Section 28H(2) of the Customs Act.

(c) The application is not barred under proviso to Section 281 (2) of the Customs Act.

4.2 The applicant has further stated that it is significant to note that the Customs Tariff is based on the Harmonised Commodity Description and Coding System CHSN in short) published by the World Customs Organisation and Explanatory Notes to HSN have long been recognised by the courts as a safe guide to interpret the Customs Tariff; furthermore, it is equally settled principle of law that classification of the goods mentioned in the Customs Tariff is governed by the General Rules for Interpretation of Import Tariff (GRI, in short); as per Rule 1 of GRI. the goods under consideration should be classified in accordance with the terms of the heading or relevant Section or Chapter Notes; therefore. Section Notes and Chapter Notes are relevant for the purposes of determining classification of the goods; moreover, on application of GRI 6 which requires that while interpreting the sub-headings of the tariff for classification, the guidance of the GRls can be applied mutatis mutandis; on application of the aforementioned GRI I, the only relevant heading under the Customs Tariff which covers subject goods and alike having the ability to digitally capture still images and recorded videos, are covered under Customs Tariff Heading 8525 of the Customs Tariff, which reads as “Television Cameras, Digital Cameras and Video Camera Recorders , Sub-heading Note 1 to Chapter 85 defines ‘High-speed’ television cameras, digital cameras and video camera recorders as the one having one or more of the following characteristics:-

– Writing speed exceeding 0.5mm per microsecond;

– Time resolution 50 nanoseconds or less;

– Frame rate exceeding 225,000 frames per second;

similarly, sub-heading Note 2 and 3 of the Customs Tariff defines ‘radiation-hardened tolerant television cameras, digital cameras and video camera recorders and night vision, television cameras, digital cameras and video camera recorders’ in the following manner, “2. In respect of sub-heading 852582, radiation-hardened or radiation-tolerant television cameras, digital cameras and video camera recorders are designed or shielded to enable operation in a high-radiation environment. These cameras are designed to withstand a total radiation dose of at least 50 x 103 Gy(silicon) (5 x 106 RAD (silicon)), without operational degradation; 3. Sub-heading 8525 83 covers night vision television cameras, digital cameras and video camera recorders which use a photocathode to convert available light to electrons, which can be amplified and converted to yield a visible image. This sub-heading excludes thermal imaging cameras (generally sub-heading 8525 89). “; it is important to note that the aforementioned definitions have been inserted into the HSN 2022 as part of Strategic Trade Control (STC) to protect the society from trans-national acquisition of strategic weapons and goods used to develop or deliver them; it can be seen that the subject goods do not satisfy any of the conditions mentioned in Sub-Heading Note 1,2 or 3 of Chapter 85 of Customs Tariff; the applicant submits and undertakes that the subject goods cannot perform the functions of radiation-hardened cameras, high-speed cameras and night-vision cameras; the subject goods are neither designed for the above stated functions nor has the capability of performing these functions; the cameras imported by the applicant are regular consumer goods for use in standard environments and use cases; thus, the subject goods are not classifiable under Sub-headings 85258100, 85258200 and 85258300 of the Customs Tariff; therefore, on application of rule 6 read with rule 1 of the GRI, the subject goods merit classification under the residuary Sub-heading 85258900 of the Customs Tariff, which reads as “Television cameras, digital cameras and video camera recorders: Other”‘, hence, according to the applicant, the subject goods are appropriately classifiable under the Sub-heading 85258900 of the Customs Tariff.

4.3 The applicant has also stated that as per the Customs Tariff, the goods falling under the Sub-heading 85258900 of the Customs Tariff are chargeable to BCD at the rate of 20% ad valorem, prior to the introduction of HSN 2022, the applicant has been claiming exemption from payment of BCD under serial number 502 of Notification No. 50/2017-Cus. for other models of cameras similar to the present camera, however, with the amendment in the Customs Tariff, the afore-stated exemption entries have also been amended; Notification No. 50/2017-Cus. provides for exemption from payment of BCD, if the imported goods fulfil the conditions mentioned in Column (2) and (3) of the Customs Tariff; in this regard, serial number 502 of Notification No. 50/2017-Cus. grants exemption to goods classifiable under Sub-heading 85258900 of the Customs Tariff which satisfy the condition of ‘Digital Still Image Video Cameras other than Camera or Camera Module of cellular mobile phones’: here, it is significant to note that post the introduction of HSN 2022 into the Customs Tariff, vide Notification No. 55/2021-Cus dated 29.12.2021, Column (2) to serial number 502 was changed from b5258020 to ‘85258900’ in essence, at present, serial number 502 of Notification No. 50/2017 provides exemption to (a) goods falling under Sub-heading 85258900; and (b) confirm to the description of’ Digital Still Image Video Cameras other than Camera or Camera Module of cellular mobile phones”, in the present case, the applicant submits that the subject goods are classifiable under Sub-heading 85258900 of the Customs Tariff and accordingly, the subject goods satisfy the condition mentioned in Column (2) to serial number 502 of Notification No. 50/2017-Cus.; on perusal of the preamble to Notification No. 50/2017, it provides that this notification superseded then prevailing notification No. 12/2012-Customs, dated 17-3-2012 except for things omitted before such suppression; at this juncture it is important to note that Notification No. 50/2017-Cus. is a successor notification to Notification No. 12/2012; it carries forward exemptions for majority of the products and the need for a fresh notification was necessitated with the introduction of the GST regime; ‘Digital Still Image Video Cameras’ were identically granted exemption under serial number 428A of Notification No. 12/2012; hence, it would be important to understand the scope of exemption entry under S. No. 428A of Notification No. 12/2012 and apply the same while interpreting S. No. 502 of Notification No. 50/2017; serial number 428A of Notification No. 12/2012 was introduced by virtue of Notification No. 28/2015-Cus dated 30.04.2015; vide this Notification, conditional exemption was granted to ‘Digital Still Image Video Cameras’ under the earlier entry to Notification No. 12/2012 was made unconditional; during this time, Letter DOF No. 334/5/2015-TRU dated 30.04.2015 was issued by the Ld. Joint Secretary, Ministry of Finance providing a summary of changes in Central Excise, Customs and Service Tax rates; vide this TRU Letter, it was provided, “All Digital Still Image Video Cameras (DSC) falling under tariff item 85258020 irrespective of their specification [including the restriction with reference to video recording time] and their parts are being exempted from Basic Customs Duty. S. No. 428A and 429 of notification No. 12/2012-Customs, dated 17-3-2012 as amended by notification No. 28/2015-Customs, dated 30-4-2015 refer”‘, on perusal of the foregoing, vide Letter, the Department clarified that the exemption under S. No. 428A of Nott tea No. 12/2012 (pari materials. No. 502 of Notification No. 50/2017) was to be gran e to all ‘Digital Still Image Video Cameras’ irrespective of their video recording capability; further, reference is also made to the decision in Creative Peripherals Distribution Ltd. v. CC. ACC Mumbai. 2020 (7)TM1 489- CESTAT Mumbai, wherein the Hon ble Tribunal relied upon the decision of the U.S. Court of the International Trade, New York in the case of Sony Electronics, Inc. v. United States, Slip Op 13-153 dated 23.12.2013, held that the ‘Digital Still Image Video Camera, which are electronically capable of recording videos (without any limitation on time) and capture images, are classifiable under the CTI 85258020 (prior to HSN 2022) as ‘digital camera only; it was also held that such cameras would be eligible to exemption from payment of BCD under Notification No. 50/2017 and that the absence of technical conditions in Notification No. 50/2017 will make all digital cameras covered under CTI 85258020 to be eligible for the exemption; in the light of the foregoing discussion, the interpretation given under TRU Letter read with Creative Peripherals (Supra) must govern the scope of S. No. 502 of Notification No. 50/2017; moreover, the restrictive interpretation given under S. No. 13 of Notification No. 25/2005-Cus. dated 01.03.2005 read with Circular No. 32/2007-Cus dated 10.09.2007 will not govern the interpretation of S. No. 502 of Notification No. 50/2017; this is because the scheme of exemption under S. No. 13 of Notification No. 25/2005-Cus is different from S. No. 502 of Notification No. 50/2017; therefore, S. No. 502 of Notification No. 50/2017 will cover all ‘Digital Still Image Video Cameras’ classifiable under CTI 85288900 of the Customs Tariff irrespective of their video recording time; in the present case, the subject goods are capable to capture still images and record videos; thus, the applicant is of the considered view that the subject goods are eligible to claim exemption benefit under serial number 502 of Notification No. 50/2017-Cus.; it is pertinent to note that the applicant has obtained BIS Certification for the subject goods under the category of ‘Digital Cameras’; the categorization of subject goods under this segment further showcases that the subject goods are eligible to claim the exemption benefit; similar to classification, Section and Chapter Notes also act as guiding factor for claiming exemption benefit; Note 3 to Section XVI of Customs Tariff provides that unless otherwise required, the goods must be classified basis their principal function; keeping the aforementioned in mind, the applicant most humbly submits that it used to classify earlier models in the erstwhile Customs Tariff under CTI 85258020 as ‘digital camera’ basis their predominant function to click still images; in the present case, the subject goods can record videos in a single sequence without any limitation subject to storage and device heating; thus, the applicant submits that fresh assessment of eligibility to claim exemption benefit based on principal function of subject goods is necessitated; for this determination, following parameters of the subject goods become necessary to be understood:

• Design: The design of subject goods is small, lightweight, handy in size when compared with video cameras making them more suitable for still photography and movie recording However, the distinguishing terms of the design remains the fact that video cameras are relatively and heavier, and more focused on the operation for movie recording in terms of the outer design This makes the video cameras unsuitable for still photography. Keeping this in mind, the subject goods have lighter an less bulky structure when compared to video cameras Moreover, the hot-shoe design is such that the subject goods are better suited for still photography as compared to video The design has elements for communicating with flash and camera body, as opposed to multiple external microphones in a video camera. Therefore, for this reason the subject goods will be considered as digital camera with more inclination towards still photography.
• Sensor Size and Megapixels: Subject goods are equipped with bigger sensors and higher megapixel of 45.7m. This feature allows the subject goods to capture high quality still images in the segment of smaller and lightweight camera models. Hence, this feature also lies in favour of the still photography feature of the subject goods. On the contrary, majority of video cameras are equipped with smaller sensor size and lower megapixels with higher bitrate when compared with ‘Digital Still Image Video Cameras . Hence, even though video cameras are capable of capturing still images, the quality of such still images are comparatively lower quality than the ones captured by Digital Still Image Video Cameras. It is significant to note that there are some video cameras which have bigger sensor size, higher bit rate and pixel quality equivalent to some of the models of ‘Digital Still Image Video Camera’. However, the distinguishing factor in such cases remains the fact that such video cameras are equipped with features like a larger body to accommodate a Cooling Fan to keep the heat under control along with suitable terminals like SDI, etc. In the present case, the subject goods have bigger sensor size, comparatively lower bit rate and 45.7m pixels. Additionally, there is no cooling fan present inside the subject goods. Therefore, keeping the aforesaid factor in mind, the subject goods have features more inclined towards the capturing of still images.
• Functionalities: Video cameras usually have features for better operation of movie recording capabilities which are usually not present in a Digital Still Image Video Camera. Essentially, the subject goods are a trade-off of some of the following features in order to keep such cameras smaller and lighter than the video cameras. One such feature is a Cooling Fan and video cameras are generally equipped with a cooling fan. This reduces the temperature inside the video camera and allows for longer duration of recording. The subject goods do not have a cooling fan making it less favorable to video recording usage. The subject goods have the capability’ of carrying out the function of still photography’ for longer durations with no significant battery or heating issues. However, although the subject goods have capability of video capturing, the function cannot be carried out for longer durations as the battery may face issues powering such a function and the heating issues become prevalent. Further, although the battery can be supported through external sources, the lack of a cooling fan disables the subject goods from longer duration video capturing.

4 4 Summarily, the applicant has submitted that, the subject goods primarily exhibit higher capabilities towards still image photography; ergonomic design of the subject goods resemble a traditional still image camera; thus, making its use for still photography easier in comparison to video shooting; the ISO capabilities (low light photography) are better for still image photography; image resolution is higher in comparison to video resolution, thus showcasing that the subject goods utilize the full capability of its sensor during still photography; the subject goods are essentially advanced version of’Digital Still Image Video Cameras’ with the principal function of capturing still images; as a result of advancement in technology, new products and new variations of existing products are developed from time to time; the subject goods owing to its features have principal function of capturing still images; keeping the aforesaid dictum in mind and the fact that the subject goods have the ability to capture still images and record videos fulfil the definition of ”Digital Still Image Video Camera’ therefore, the applicant is of the considered view that the subject goods are covered within the scope of Column (3) to S. No. 502 of Notification No. 50/2017. Hence, they are eligible to claim exemption under S. No. 502 of Notification No. 50/2017 against the import of subject goods.

4.5 The applicant has also stated that, the subject goods have not been launched commercially in India and it is requested to ensure that the confidentiality thereof is strictly maintained.

5. The concerned Commissionerate has commented inter-alia that, on plain reading of section 28E(b) of the Customs Act, 1962, it is clear that there should be written decision of ‘advance ruling’ on the questions referred by the applicant in respect of any goods prior to its importation; however, as per records available on ICES, the importer is already involved in importation of the referred goods i.e. ‘NIKON Camera Model N2120’, in commercial quantity valued to Rs. 24,94,63,502/- from ACC Import, New Delhi; vide these imports, the applicant has self-assessed the goods with classification under CTH 85258900 with benefit of Notification No. 50/2017-Cus. (S.No. 502); therefore, the applicant is seeking advance ruling for classification (CTH 85258900) and Notification benefit (50/2017-Cus, S.No. 502) in which they’ are already importing the same product; it appears that the applicant does not fulfil the provisions of section 28E(b) of the Customs Act, 1962 to seek advance ruling in respect of the goods which are already being imported by them in commercial quantity before any written decision of the Authority; it appears that the application filed by M/s Nikon India Private Limited merits rejection in terms of section 28E(b) of the Customs Act, 1962.

6. In respect of the application for advance ruling, personal hearing took place on 01.09.2023 in virtual mode, wherein the advocate for the applicant started by referring to the comments of the concerned Commissionerate wherein it is stated that as per definition of ‘advance ruling under section 28E (h) of the Customs Act. 1962, there should be a written decision of advance ruling on the questions referred in respect of goods prior to its importation whereas the applicant is already involved in the importation of goods in question The advocate mentioned that there is no bar in seeking advance ruling even if prior imports are there as this issue has already been settled. moreover before the date of filing of application for advance ruling, there were only 3 imports of the nature of sample and commercial import has taken place after filing of the application. Thereafter, he briefly explained features of the goods in question and stated that these goods are primarily, still image camera with video capability. He also referred to earlier advance rulings issued in this regard and stated that goods in question are similar identical. He also stated that they are seeking ruling in the matter, certainty although goods have already been cleared under the desired classification with notification benefit.

7. The applicant vide their letter dated 31.08.2023 submitted reply to the comments of the concerned Commissionerate wherein it is stated inter-alia that, the Commissionerate has acknowledged that the question raised in the application is not pending before any officer of Customs, the Appellate Tribunal or any Court, therefore, it is undisputed that the application is not barred under proviso to section 281 (2) of the Customs Act; as regards the rejection proposed in terms of section 28E(b) of the Customs Act based on the commercial imports made by the applicant, in the past, reiterating the submissions earlier made, it is submitted that on the commercial imports sought after filing of application, the applicant requested for provisional assessment, in light of the pendency of their application for advance ruling before CAAR, however, the request was denied, imports made before filing of application cannot be said to be in commercial quantities. The applicant lastly opined that they are eligible for seeking advance ruling in light of the order of the Hon’ble Delhi High Court, in the case of D.R.I. Vs M/s Spraytec India Ltd., 2023/DHC/000367 and earlier rulings issued by CAAR.

8. Additional submissions have also been given by the advocates for the applicant wherein, while reiterating certain submissions it is stated inter-alia that the term ‘digital still image video camera’ has not been defined in the HSN Explanatory’ Notes, it refers to a class of cameras that are primarily suited for still image photography and also have the capability to record videos; thus intention can also be ascertained by application of Note 3 to Section XVI of the Customs Tariff which requires goods to be classified as per their principal function. The applicant also reiterated that the subject goods are classifiable under Sub-heading 85258900 and are eligible for exemption from payment of BCD in terms of Notification No. 50/2017-Cus. (SI. No. 502)

9. Having completed the procedure laid down in the CAAR Regulations, I first allow the application, taking into account the facts of the case and submissions made by the applicant and the concerned Principal Commissioner of Customs. In view of the submissions made in the application for advance ruling, comments of the concerned Commissionerate. submissions made by the applicant during the personal hearing and their additional submissions. I proceed to discuss and give ruling on the following questions:-

(a) Whether the subject goods proposed to be imported by the applicant are classifiable under Customs Tariff Item 85258900 of the Customs Tariff?

(b) If the answer to question (a) is affirmative, whether the applicant can claim benefit under S. No. 502 of Notification No. 50/2017-Cus. dated 30.06.2017?

(c) If the answer to the question (a) and/or (b) is in the negative, then, what is the appropriate classification of subject goods when imported along with accessories under the Customs Tariff and/or effective rate of duty under such appropriate classification.

9.1 I note that the applicant has proposed to import Nikon Camera Model No. N2120 as a complete product [i.e. camera body, lens (optional), battery and battery charger, Adapter etc.]. I also note that, the Central Board of Excise & Customs (now CBIC) issued Circular No. 32/2007-Cus. dated 10.09.2007 as doubts were being raised in the field formations, whether ‘digital camera with still image as well as moving image capability” would be eligible for exemption benefit under the entry as Digital Still Image Video Camera’. In the said circular, it is mentioned inter-alia that, the World Customs Organization (WCO) has clearly outlined those features of the Digital Video camera Such cameras have been described as digital cameras that capture light images, convert them to digital electronic signals and then record such digital image data on internal or removable media (built-in memory’ or diskettes). These images can be reproduced by connecting the camera to a video monitor (or TV), an ADP machine, or by inserting the media in the ADP machine. This type of digital cameras can produce both video signals (e.g., NTSC, PAL, SECAM or other similar video format) and computer readable image data like MPEG “, the term video relates to recording, reproducing or broadcasting of visual images. It is a technology7 of electronically capturing, recording, processing, storing, transmitting and reconstructing a sequence of still images representing scenes in motion. The term ‘still image video camera’ covers the types of camera that take still images and stores them as single frame of video. These single video frames when reproduced at a specified frame rate achieve an illusion of moving image. The minimum frame rate is about fifteen frames per second. The term ‘digital still image video camera’ covers only digital camera that have the capability of taking still images. This would also include digital cameras that take moving images for limited period of time, although they’ are primarily still image cameras. Such cameras fall under tariff item 85258020. However, digital cameras that can take both still images and moving images like camcorder or video recorder falling under tariff item 85258030 shall not be covered under the said entry. Digital still image video cameras can also be differentiated from the still cameras of heading 9006 i.e. photographic film cameras. Cameras of this type are also not eligible for the benefit of these notifications. It is clarified that benefit of entry at SI. No. 314 of Notification No. 21/2002-Cus. as well as SI. No. 13 of Notification No. 25/2005-Customs dated 1.3.2005 would be available to ‘digital cameras’ with still image recording as its principal function. This would also include those digital cameras that have the capability of recording moving images for a limited period of time.

9.2 I note that the concerned Commissionerate has neither commented on classification of the subject goods nor on applicability of serial number 502 of Notification No. 7-Cus. Dated 30.06.2017, on import of the subject goods However, it is observed that the concerned Commissionerate has allowed import of the subject goods under Sub-heading 85258900 and extended exemption from Basic Customs Duty vide Notification No. 50/2017-Cus. (S No. 502). The concerned Commissionerate has also inter-alia commented that the applicant does not fulfil the provisions of section 28E(b) of the Customs Act, 1962 to seek advance ruling in respect of the goods which are already being imported by them in commercial quantity before any written decision of the Authority; it appears that the application filed by M/S Nikon India Private Limited merits rejection in terms of section 28E(b) of the Customs Act, 1962. However, I note that CAAR, New Delhi, had issued an advance ruling dated 05.10.2021 in the application for advance ruling filed by M/S. Spraytec India Ltd. wherein, while noting that goods in question have been imported in the past, the Authority had also observed that the application for advance ruling relates to the ongoing activity. However, a ruling by the Authority shall impart certainty to the issue of appropriate classification, provided that the jurisdiction of this Authority is not ousted by proviso to section 28-1 (2) of the Customs Act, 1962. Accordingly, in line with the earlier ruling dated 05.10.2021, I intend to issue ruling in the instant application for advance ruling as the same would provide certainty to classification and applicability of exemption notification even though, the application relates to an on-going activity. Moreover, the application is not barred under proviso to Section 28I (2) of the Customs Act, 1962. Further, I also note that the concerned Commissionerate has not supplied the Annexure containing details of import of the subject goods made by the applicant. Thus, I intend to rely on the declaration of the applicant that commercial imports of the subject goods have taken place after filing of the instant application for advance ruling.

10.1 Having gone through the submissions of the applicant and comments of the concerned Commissionerate, I am of the view that there is no doubt that Nikon Camera Model No. N2120 with standard accessories only, merit classification under Subheading 85258900.

10.2 I note that the Central Board of Excise & Customs (now CBIC) issued Circular No. 32/2007-Cus. dated 10.09.2007 as doubts were being raised in the field formations, whether ‘digital camera with still image as well as moving image capability’ would be eligible for exemption benefit under the entry’ as ‘Digital Still Image Video Camera’. In the said circular, it is mentioned inter-alia that, “the World Customs Organization (WCO) has clearly outlined that features of the Digital Video camera. Such cameras have been described as digital cameras that capture light images, convert them to digital electronic signals and then record such digital image data on internal or removable media (built-in memory or diskettes). These images can be reproduced by connecting the camera to a video monitor (or TV). an _AI)P machine, or by inserting the media in the ADP machine This type Of digital cameras can produce both video signals (e.g., NTSC, PAL, SECAM or other similar video format) and computer readable image data like the term video relates 10 recording, reproducing or broadcasting of visual images, it is a technology of electronically capturing recording, processing storing, transmitting and reconstructing a sequence of still images representing scenes in motion, the term ‘still image video ‘ camera covers the types of camera that take still images and stores them as single frame of video; these single video frames when reproduced a specified frame rate achieve an illusion of moving image; the minimum frame rate is about fifteen frames per second; the term ‘digital still image video camera ‘ covers only digital camera that have the capability of taking still images; this would also include digital cameras that take moving images for limited period of time although they are primarily still image cameras; such cameras fall under tariff item 85258020; however, digital cameras that can take both still images and moving images like camcorder or video recorder falling under tariff item 85258030 shall not be covered under the said entry; digital still image video cameras can also be differentiated from the still cameras of heading 9006 i.e. photographic film cameras; cameras of this type are also not eligible for the benefit of these notifications; it is clarified that benefit of entry at Sl. No. 314 of Notification No. 21/2002-C.us. as well as Sl. No. 13 of Notification No. 25/2005-Customs dated 1.3.2005 would be available to ‘digital cameras ‘ with still image recording as its principal function; this would also include those digital cameras that have the capability of recording moving images for a limited period of time.

10.3 I find that in view of the definition of ‘Digital Still Image Video Camera’ in CBIC Circular 32/2007-Cus. dated 10.09.2007, whereby such cameras have the capability of taking still images and also include digital cameras that take moving images for a limited period of time, although they are primarily still image camera Whereas regarding cameras which the applicant intends to import, recording time is not limited, it may appear that the subject goods fall outside the purview of ‘Digital Still Image Video Camera’.

10.4 I have also noted that the applicant has inter-alia stated that the subject goods have a design concept that is based on the traditional still image cameras with interchangeable lens and a viewfinder along with the shutter release button; these design elements make the subject goods more suited for still photography; the grip design used in the subject goods is a notable feature for still image cameras; the subject goods primarily exhibit higher capabilities towards still image photography; ergonomic design of the subject goods resemble a traditional still image camera; thus, making its use for still photography is easier in comparison to video shooting; the ISO capabilities (low light photography) are better for still image photography; image resolution is higher in comparison to video resolution, thus showcasing that the subject goods utilize the full capability of its sensor during still photography; as a result of advancement in technology, new products and new variations of existing products are developed from time to time; the subject goods owing to its features have principal function of capturing still images. The applicant has also stated that the subject goods do not satisfy any of the conditions mentioned in Sub-Heading Note l, 2 or 3 of Chapter 85 of the Customs Tariff; the cameras imported by the applicant are regular consumer goods for use in standard environments and use-cases.

10.5 As regards apprehension that the subject goods fall out of the purview of the Digital Still Image Video Camera, for the reason that recording time is not limited and view of the aforementioned circular, it appears that the subject good is not eligible for the benefit of S No. 502 of Notification No. 50/2017-Cus. dated 30.06 2017. However, the wording used in the said Circular lay emphasis on principal function and not excludes cameras which have the capability to record moving images for a unlimited period of time. Language used in the Circular is of inclusive nature, whereby under the term, ‘Digital Still Image Video Camera’ includes digital cameras that take moving images for limited period of time although they are primarily still image cameras. This may lead to inference that exemption under the notification is admissible to only those digital cameras whose principal function relates to still photography even though such cameras are capable of recording moving images. Based on the reasons cited by the applicant in the application, said model of digital camera proposed to be imported by the applicant is principally a still image digital camera Accordingly, exemption under serial number 502 of Notification No. 50/2017-Cus. dated 30.06.2017 is admissible on import of said model no. of digital camera

11. In view of the above, I rule as under:

11.1 Nikon Camera Model No. N2120 with standard accessories proposed to be imported by the applicant is correctly classifiable under Sub-heading 85258900 of the First Schedule to Customs Tariff Act, 1975. Also, in terms of, “The Accessories (Condition) Rules, 1963, the said camera along with the standard accessory, if presented together shall be chargeable under the sub heading 85258900. However, any item/accessory, optional in nature, would merit classification in the tariff heading appropriate to it.

11.2 The benefit vide S. No. 502 of Notification No. 50/2017-Cus. Dated 30.06.2017 is available on import of the aforesaid Nikon Camera Model No. N2120.

11.3 The applicant has submitted that the device is not launched commercially in India and requested to ensure maintenance of its confidentiality. In this regard, I note that the commercial import of the subject goods in question is already underway, thus, I am of the view that maintaining confidentiality by invoking proviso to rule 27 of the Customs Authority for Advance Rulings Regulations, 2021, is not required in the instant matter.