ORDER
P.C. Jain, Member (T)
1. The question involved in the present appeal is whether a machine described as ‘Canofile 510’, a desktop electronic filing system falls under Tariff Heading 84.71 or under Tariff Heading 84.72.
2. Appellants herein contended that it falls under Tariff Heading 84.71, whereas the Additional Commissioner of Customs has held on classifiable under Tariff Heading 84.72.
3. We have heard both sides. We observe from the impugned order that Shri Anoop Khandelwal, Manager (Imports) had admitted before the adjudicating authority that while he had no objection to the classification being changed to Tariff Heading 84.72, the goods could not be confiscated for the purpose of EXIM Policy, inasmuch as the Custom House had been taking a view earlier that these machines were falling under 84.71. He had, therefore prayed for a lenient view to be taken.
4. Apart from that the Adjudicating Officer has observed as follows :-
“I have gone through the case arid submissions made at the time of personal hearing. It is observed that Heading No. 84.71 includes only such digital machines which fulfil the conditions as mentioned in Note 5A (a) of Chapter 84. It is noted that Canofile is not freely programmable. It is having a fixed programme designed by the manufacturer keeping in view the ultimate use. Further, it is not able to make arithmetical computations. Digital machines of Heading 8471, do not include machines which operate only on fixed programmes.
I, therefore hold that Canofile merits classification under Heading 8472.90 as “other office machines” because Canofile has a base for fixing or for placing on table, is used for keeping and retrieving files to save space in offices. Heading 84.72 very clearly covers electronically operated machines of Canofile type. Being office machine, it requires specific import licence for its clearance, which importer has failed to produce.”
5. As against that, ld. Advocate Shri Pradeep Jain for the appellants has urged that subsequent to the passing of the impugned order; the appellants had sought clarification from the Deptt. of Electronics vide their letter dated 7th March, 1997 enclosing a copy of their letter dated 17th April, 1996 addressed to the Directorate General, (Foreign Trade). The Deptt. of Electronics in its letter dated 17-3-1997 has clarified that the item Canofile desktop electronic filing system can be classified under Heading 84.71 in the ITC HS. Ld. Advocate, therefore, prays that in view of this clarification from a competent authority like the Department of Electronics, the goods should be treated as correctly imported under EXIM Policy and, therefore, there should be no question of confiscation of goods and imposition of redemption fine.
We have carefully considered the pleas advanced from both sides. We observe that the Catalogues produced by the appellants herein show that the ‘Canofile 510’ is only a machine for management of documents that saves time, space and money. It does not satisfy the definition of automatic data processing machine given in Chapter Note 5A(a) to Chapter 84. This tariff entry we further observe is alligned with HSN and, therefore, HSN Explanatory Notes relied upon by the lower appellate authority will be of high persuasive value which has excluded fixed programme machines from the scope of Tariff entry 84.71. As regards the plea of the ld. Advocate based on Department of Electronics clarification, we do not find much force in it. It is not indicated from the appellants referring letter dated 17-3-1996 that the competing entries namely whether Tariff Heading 84.72, Chapter Note 5A(a) and the HSN Explanatory Notes were before them. We are, therefore, of the view that the classification of the goods has been rightly made under Tariff Heading 84.72.
6. As regards the confiscations of the goods we are of the view since, it is admitted in the Order-in-Original passed by the Additional Collector that the Custom House practice has been to assess the machines under Tariff Heading 84.71 a more lenient view is required to be taken by the Adjudicating Authority. Keeping in view over all facts and circumstances of the case we reduce the redemption fine from Rs. 1.5 Lakhs to Rs. 50,000/-. Personal penalty has already been set aside by the lower appellate authority.
7. But for the above modification in redemption fine, the impugned order is otherwise confirmed.