“Student interactive respond system” solely used along with ADP is not classifiable under  CTH 8543: CESTAT [Read Order]

 The Bangalore bench of  Customs, Excise & Service Tax Appellate Tribunal (CESTAT) has held that the “Student interactive respond system” solely used along with ADP is not classifiable under  CTH 8543.

The Respondent, Next Education India  Pvt Ltd had imported “Student interactive respond system” and classified the same under CTH 8471 60 29. However respondent classified the goods under CTH 8543 70 99. On appeal, the Commissioner (Appeals) vide impugned order held that the classification made by the Appellant revenue is related to electrical machines or Apparatus which will operate to give the desired outcome when plugged into electrical sources and considering the decision of the Tribunal in the matter of M/s D Link India Ltd and considering the classification of same goods through other Customs houses under B/E No. 3439166 dated 07.05.2011 at Chennai and B/E No. 4146369 dated at Hyderabad. Commissioner (Appeals) classified the goods under CTH 8471 60 29.

It was submitted that the goods consisting a wireless keypad (note pad) and IR receivers. Both these components constituting the student response system work on the principles of wireless transmission technology. Even though the impugned goods are connectable to the CPU of an Automatic Data Processing (ADP) machine, they stand excluded from the heading 8471 under Chapter Note 5(D) of Chapter 84 of the Customs Tariff Chapter Note 5(E) to the Chapter 84, stipulates that machines incorporating or working in conjunction with an ADP machine and performing a specific function other than data processing are to be classified in the heading appropriate to their respective function or falling that in residual heading. Hence the impugned goods are classified under heading 8543 of the Customs Tariff.

As per the above, heading 8543 electronic machines and apparatus having individual functions, not specified or included elsewhere in the Chapter (including 16 codeless infra-red devices for the remote control of television receiver, video recorder or other electrical equipment). Hence Lower authority properly classified the goods under CTH 8543 70 99. 

The respondent had classified the goods under CTH 8471 60 29 under sub heading input or output unit whether or not containing a storage unit in the same domestic data processing unit or other machines by processing such data not elsewhere specified or included. However, Appellant revenue had classified the goods under CTH 8543 87 99 which covers electronic machines and apparatus having individual functions specified or included elsewhere in the Chapter Note 85. 

The Appellant relied on Chapter Note 4 of Section XVI of the Customs Tariff Act, 1944 however as per the second part of explanatory notes of the CTH 8543, this heading specifically states that “electrical appliances and apparatus of this heading must have individual functions.” It further stated that “most of the appliances of this heading consist of an assembly of electrical goods or parts (valves, transformers, capacitors, chokes, resistors etc). The impugned goods do not satisfy any of the above criteria and therefore classification under CTH 8543 as an item with individual function is ruled out. 

A two-member bench comprising Mr P. A. Augustian, Member (Judicial) and Mrs R. Bhagya Devi, Member (Technical) upheld the observation of the Commissioner in the impugned order that “the equipment is teaching accessories that enable students in a class to respond to queries and these equipment are used along with the ADP machine”. The CESTAT rejected the appeal of the revenue.

Mr. K.A. Jathin appeared  for Appellant and Mr. M. Balagopal appeared for Respondent

To Read the full text of the Order CLICK HERE

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