|
Circular No. 45 dated 30th June 1998
Chief Commissioner of Customs & Central Excise,
New Delhi has sought clarification whether a combination of two equipments which
are covered separately under two different Sl. Nos. of the same notification or
two different notification can be allowed exemption under the said notification.
In the instant case, the equipment was Auto Keratometer ARK 700, which is a
combination of two separate equipments i.e. Refractometer, and Keratometer. Both
are separately covered under notification No. 36/96-Cus. Sl. No. 196 (list 17,
Sl. No. 20 & 25) respectively. On an import of the above equipment, doubt
was raised whether benefit of notification to the above equipment can be given
as exemption of duty is available to the two items separately and a combination
of the two in not specifically included for exemption in the notification.
Collectors, Conference on 21/ 22, July, 1994 at
Madras had discussed this issue and has held that it is incorrect to club two
entries of a particular notification.
2. However, CEGAT in
its Orders No. 1995 (60) ECR 85 and 1996 (82) ELT 238 have allowed the appeal
filed by the importers on the ground that merely on the basis of the fact that a
machine can perform an additional function, benefit of the notification cannot
be disallowed especially when the two items are separately covered by the same
notification. It had held that a combination of the two machines does not turn
out to be third entity since in performs functions of both the equipments.
3. Board has
re-considered this issue in depth. As per HSN explanatory notes relating to
classification of multi function machines, where it is not possible to determine
the principal function and where the context does not otherwise require, it is
necessary to apply general interpretative Rule 3(C). As per the said rule, where
the goods cannot be classified by reference to interpretative rule 3(a) or 3(b)
they are to be classified under the heading which occurs last in numerical order
among those which equally merit consideration.
4. The multi-
function machines are being manufactured and imported regularly. The above
decision of the tribunal has been reiterated by many benches before the
discussion in the Tariff conference and after the decision also.
5. It is, therefore
decided that for the purpose of classification and entitlement for exemptions
main function of the machine may be considered as a criterion and benefit be
given to a combination machines treating it as a machine performing main
function and its additional function may be ignored for the purpose of
classification and exemption under a notification. Where the main function is
not ascertainable, the Rule 3 (c) may be applied.
|