The Chennai Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), ruled that System Desktops are classifiable as ‘automatic data processing machines’, thereby granting relief to M/s. Asus India Private Limited.
The appellant, Asus India, had filed four Bills-of-Entry for import of goods declared as “Computer System Desktop”. Upon examination, the goods were found to be personal computers with accessories like mouse, power adapter and gaming console, and as per the website of the supplier, it was ascertained that the goods were specially designed for gaming purposes. As their principal function was gaming, the goods were re-classified under CTH 9504 5000 by the Revenue.
The lower appellate authority, concluded that the impugned goods are high-end computers which are specially designed for playing games, observing that although the product satisfied the condition of the Notes for CTH 8471 and do multi-tasking, but as mentioned in the HSN Explanatory Note 2 to Chapter 9504, “video games and machines whose objective, characteristic and principal function are such that they are intended for entertainment purposes (game-playing) remain classified in this heading, whether or not they fulfil the conditions of Note 5(A) to Chapter 84 regarding automatic data processing machines.”
A Coram comprising Vasa Seshagiri Rao, Technical Member and P. Dinesha, Judicial Member observed that “Computer Systems with modifications for enhancement of gaming, by inclusion of additional audio/video devices, are being classified under CTH 8471 as ADPs. In support of his contention, the Ld. Advocate has submitted many copies of Bills-of-Entry where similar products by the same manufacturer with the latest configuration in new series of machines have been classified under CTH 8471 in various Custom Houses and Air Cargo Complexes.”
The Tribunal further went on to note that these are imported from China and at the time of export, these are classified as computers being classified under Chapter Heading 8471.
“Considering the differences that exist between video game console, video game machine and the imported product, we hold that the imported ‘Computer System Desktops’ are classifiable under CTH 8471 as automatic data processing machines. Consequently, we set aside the impugned order” the Bench concluded.
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