JUDGMENT
Gowri Shankar, Member (Technical)
1. The appellant manufactures what is popularly known as “STD/PCO equipment” that is utilised by operators of the telephone booths for the purpose of displaying, recording and calculating charges on telephone calls for the benefit of persons who utilise the booths to make calls. For the operation of this apparatus, appellant inscribes on erasable programmable read only memory (EPROM for short) data without which the apparatus cannot perform these functions. The appellant does not itself manufacture the EPROMs but purchases them from its dealers. The notice issued to it proposes that the activity that the appellant undertook resulted in emergence of goods classifiable under heading 8517.00 of the tariff. The Assistant Commissioner, whose order has been confirmed by the Commissioner (Appeals), has confirmed the proposal in the notice demanding duty on the goods. Hence this appeal.
2. The contention of the appellant is that the goods could not be classifiable under heading 85.17. That heading is for “electronic apparatus for line telephony or line telegraphy including such apparatus for carrier current line system.” Although the EPROM that the appellant purchased can be used in conjunction with telephone, they are not necessary for the telephony or telegraphy to be performed and that they are not apparatus for this purpose.
3. The departmental representative cites the provisions of the Explanatory Notes to the Harmonised System of Nomenclature. We reproduce below the relevant portion of the note that he relies on:
“Other devices occasionally fitted to subscribers’ telephones include devices for memorising a telephone number; devices for holding a connection on line while communicating with a person on another extension and those for listening in to or breaking into other lines.
Telephones may be mounted in several ways. Generally speaking, they are either designed for wall mounting or are of the portable type for placing on tables, etc. However, there are special types (e.g., the military field-telephone; “parlophones” for buildings, of which part may be of built-in design for fixing into walls; videophones for buildings, which are a combination consisting essentially of a telephone set for line telephony, a television camera and a television receiver (transmission by line); coin-operated telephones for public booths; sealed telephones for use in mines).
The heading covers all kinds of telephones sets including those in which a telephone set (incorporating a selector and a hand-set) and a device for the transmission of recorded messages and, sometimes, the recording of incoming calls constitute an integrated unit.”
4. We are not able to see how these notes support the conclusion that has been arrived at. The first paragraph of these notes refers to devices occasionally fitted to subscribes telephone for purposes of memorising telephone number, holding a telephone etc. The STD apparatus that the appellant manufactures has got nothing directly to do with the making a telephone call. Its function is merely to measure the length of the call, and calculate the charge payable and to assistance in displaying number, duration of the call for the users’ benefit. Therefore, while it is perhaps at the most an adjunct to a telephone system, it is not a part or accessory of it. The reference is the last paragraph of the notes to telephone sets including those in which an answering machine is incorporated again is not relevant. The telephone set by itself is very much an apparatus for line telephony. The last paragraph says that it does not cease to be such an apparatus merely because an answering machine is incorporated in it. The Notes itself specifically exclude from classification under this heading, telephone answering machine designed to operate for the telephone set but not forming an integral part of the set and telephone call register and counters classification under heading 8517 therefore cannot be upheld. The classification that the appellant claimed is under heading 85.24. We are not required to express any opinion as to the correctness of this claim. That being the case, all that is required to be said is that the demand laid in the classification that has been determined cannot be sustained.
5. Appeal allowed. Impugned order set aside.