Collector of Customs Vs. Kay Floppy Industries - Court Judgment

Excerpt:
1. these two appeals are filed by the collector against the common order passed by the collector (appeals), madras.2. the issue arises for consideration in these appeals is as to whether "floppy disc drive" is entitled to the benefit of notification no.237/83-cus., dated 18-8-1983. sl. no. 2 and the table of the notification describe the goods as machines for transcribing data on to data media in coded form. the ld. collector while examining the issue followed the judgment of the tribunal in the case of 485/87-b2, dated 15-1-1987. the tribunal in the said judgment has held that the items fall within the description si. no. 2 to the table of the notification.the revenue is aggrieved with this order of the collector and they are contending that this item does not fall within the ambit of the said sl. no. 2 of the table to the notification.3. we have heard the ld. d.r. and perused the records. collector (appeals) has correctly followed the tribunal's judgment referred in the classification head. it is also noticed that the tribunal has had earlier passed similar order in the case of unic electronics order no.421/87-b2 holding that the goods come within the ambit of sl. no. 2 of the table to the notification. "we have considered the arguments of both sides. we have carefully perused the notification. we note that the notification exempts several peripherals like paper tape punch and printers (4 varieties) are more distant peripherals than the floppy disc drive as argued by the learned advocate. however, the question before us is whether or not floppy disc drive is a machine for transcribing data onto data media in coded form. there is no doubt that the imported goods constitute machines. the purpose of the floppy disc drive is to receive data through the keyboard and to convert the data into a code : which is recorded on the floppy disc in the form of magnetic dots. this data can be retrieved through the floppy disc drive and displayed on a screen and, when required, printed. the floppy disc drive discharges the function of writing, i.e., converting into magnetic code and converting the coded data into language. we have no hesitation at all in holding that the floppy disc drive does transcribe data onto data media, in view of the explanation given before us. even the cccn notes support this view. in our opinion, the collector of customs (appeals) committed an error when he rejected the claim holding that the floppy disc drive cannot transcribe data on its own i.e. without the help of any other computer peripherals. during the course of hearing we asked both the parties to state that if there is no appliance or device which can, by itself, code data and transcribe it on the floppy disc. no such machine seems to exist. the floppy disc itself is always a separate unit from the floppy disc drive and it is on this disc that the data is stored. the floppy disc and the floppy disc drive are complementary to each other and each one is totally useless without the other. we also note that no computer can work without a mechanism for storage and there could be no recording or storage without the floppy disc drive or similar equipment." 3. we do not see any reason to differ from the ratio of the judgment and in view of the matter, we uphold the impugned order and dismiss the appeals.

Judgment:
1. These two appeals are filed by the Collector against the common order passed by the Collector (Appeals), Madras.

2. The issue arises for consideration in these appeals is as to whether "Floppy Disc Drive" is entitled to the benefit of Notification No.237/83-Cus., dated 18-8-1983. Sl. No. 2 and the table of the Notification describe the goods as Machines for transcribing data on to data media in coded form. The Ld. Collector while examining the issue followed the judgment of the Tribunal in the case of 485/87-B2, dated 15-1-1987. The Tribunal in the said judgment has held that the items fall within the description SI. No. 2 to the table of the Notification.

The Revenue is aggrieved with this order of the Collector and they are contending that this item does not fall within the ambit of the said Sl. No. 2 of the Table to the Notification.

3. We have heard the Ld. D.R. and perused the records. Collector (Appeals) has correctly followed the Tribunal's judgment referred in the classification head. It is also noticed that the Tribunal has had earlier passed similar order in the case of Unic Electronics Order No.421/87-B2 holding that the goods come within the ambit of Sl. No. 2 of the Table to the Notification.

"We have considered the arguments of both sides. We have carefully perused the notification. We note that the notification exempts several peripherals like paper tape punch and printers (4 varieties) are more distant peripherals than the floppy Disc Drive as argued by the learned Advocate. However, the question before us is whether or not floppy disc drive is a machine for transcribing data onto data media in coded form. There is no doubt that the imported goods constitute machines. The purpose of the floppy Disc Drive is to receive data through the keyboard and to convert the data into a code : which is recorded on the floppy disc in the form of magnetic dots. This data can be retrieved through the floppy disc drive and displayed on a screen and, when required, printed. The floppy disc drive discharges the function of writing, i.e., converting into magnetic code and converting the coded data into language. We have no hesitation at all in holding that the Floppy Disc Drive does transcribe data onto data media, in view of the explanation given before us. Even the CCCN Notes support this view. In our opinion, the Collector of Customs (Appeals) committed an error when he rejected the claim holding that the Floppy Disc drive cannot transcribe data on its own i.e. without the help of any other computer peripherals. During the course of hearing we asked both the parties to state that if there is no appliance or device which can, by itself, code data and transcribe it on the floppy disc. No such machine seems to exist. The floppy disc itself is always a separate unit from the floppy disc drive and it is on this disc that the data is stored. The floppy disc and the floppy disc drive are complementary to each other and each one is totally useless without the other. We also note that no computer can work without a mechanism for storage and there could be no recording or storage without the floppy disc drive or similar equipment." 3. We do not see any reason to differ from the ratio of the judgment and in view of the matter, we uphold the impugned order and dismiss the appeals.