The Bangalore bench of the Customs, Excise & Service Tax Appellate Tribunal ( CESTAT ) has viewed that Web Cameras are not Digital Cameras and set aside the demand against Xiaomi Technology India Ltd.
The appellant M/s. Xiaomi Technology India Private Limited imported the Mi Web Camera classifying the same under Chapter Heading 8473 3099 as parts and accessories of Automatic Data Processing ( ADP ) Machines. The original authority and the Commissioner ( Appeals ) in the impugned order classified the said products under Chapter heading 8525 8010 since the web camera imported by the appellant was a standalone item unlike in other cases where the web camera was imported along with the ADP machine.
Counsel submitted that the Mi Web Camera consists of the camera lens, a USB plug to connect exclusively to an ADP machine as a plug-and-play and a clamping slot. The web camera is solely and principally used with the ADP machine and cannot function independently. The web camera is used to capture images/video and deliver the same in the form of code signals which are displayed on the computer/laptop. Its application is for videoconferencing, online chatting etc; it is imported solely to use the same with the appellant’s new product known as notebook computers, which are ADP machines. Therefore, it is claimed by the appellant that the web camera is rightly classifiable under Chapter heading 8473 3099 as parts and accessories suitable for use solely or principally with machines of Heading 8470 to 8471.
A two-member bench comprising Mr P A Augustian, Member ( Judicial ) And Mrs R Bhagya Devi, Member ( Technical ) observed that as per Chapter Note 5(C) and 5(D), the items are rightly classifiable under Chapter Heading 8471 as long as they satisfy the conditions laid therein and there is no dispute that these conditions have not been satisfied, the item has been excluded from Chapter 8471 only on the ground that Chapter Note 5(D) excludes television camera, digital cameras and video camera recorders.
Moreover, the imported item’s web cameras are used principally with the ADP machines and are not under dispute. The imported item under question is a web camera and as has been already decided in the case of Hi-Tech Computers vs. Commissioner of Customs, the Tribunal has clearly distinguished that the web cameras are not digital nor can be considered as television camera. Therefore, the web cameras are rightly classifiable under Chapter Heading 8473 as claimed by the appellant and not under Chapter Heading 8525 as classified by the Department.
The CESTAT held that Mi Web Cameras are rightly classifiable under Chapter Heading 8473 and set aside the impugned order while allowing the appeal of the appellant.
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