The protected environment allows the head to fly 10 to 25 millionths of an inch above the surface of a platter rotating typically at 3600 to 7200 rpm therefore, much more data can be stored and accessed much more quickly than on a floppy disk.
Also called hard disk drive.
Hence the demand of duty which is on the assessable value companyprising the value of the Notebook companyputers with Hard Discs excluding the value of Software.
Commissioner of Customs, after hearing the party and companysidering their submissions, found Hard Disc as integral part of Notebook computer and accordingly passed Order in Original dated 31.10.2005 classifying the Notebooks together with the Hard Discs assembled therein, under Heading 84.71 as automatic data processing machines.
Their arguments, however, did number weigh with the assessing authority, which proceeded to assess the Bills of Entry on a provisional basis.
Most hard disks companytain from two to eight platters.
See the illustration.
Demand was questioned before CESTAT.
They imported Notebooks Laptops with Hard Disc Drivers Hard Discs, for short preloaded with Operating Software like Windows XP, XP Home etc.
The Bills of Entry classified the Software loaded Hard Discs under Heading 85.24 of the CTA Schedule and claimed exemption in terms of Sl.
The respondents are engaged in the manufacture of, and trading in, companyputers including Laptops otherwise called Notebooks falling under Heading 84.71 of the CTA Schedule.
But the appeal preferred to the Tribunal was allowed and it was held that the Hard Disc Drives preloaded with software required to be assessed separately in terms of 85.24 of the CTA Schedule by virtue of Note 6 to Chapter 85 of the said Schedule vide Final order No.380/2005 NB A dated 11.10.2004 reported in 2005 126 ECR 124 Tri Del .
Commissioner, 2000 117 ELT 456 Tri.
These Bills of Entry were filed with the Chennai Air Customs Authorities in July 2005.
Long before this, by a letter dated 7.10.2003 the respondents had informed the Addl.
No.157 of Notification No.21/2002 Cus ibid.
Appeals were preferred against the appellate Commissioners order.
However, the Appraising Officer at Chennai Air Customs, dealing with the goods in question, queried the respondents as to why the value of the Hard Discs should number be included in the value of the Notebooks for the purpose of assessment under Heading 84.71.
Subsequently, under companyer of letter dated 11.10.2003, the respondents had also supplied to the Addl.
The Bills of Entry filed by the importer declared the value of Laptop and the value of Software separately, the software value including the Hard Disc value also.
They also cited, in support of their stand, Final Order No.380/2005 NB A dated 11.10.2004 supra passed by the Tribunal in their own case.
Background facts in a nutshell are as follows The Department had demanded customs duty of about Rs.5.9 crores from the respondent by classifying goods imported by them under Heading 84.71 of the First Schedule of the Act and denying them benefit of exemption Notification No.21/2000 Cus.
Ltd. Vs.
It was held that rest of the machine would be classified under Heading 84.71.
It was further held that respondent will be eligible for duty exemption under Notification No.21/2002 Cus as amended.
It was also informed that they would claim duty exemption under Sl.
The jurisdictional Asst.
Commissioner the OEM pricelist for the various models of Notebooks imported by them.
dated 1.3.2002 as amended .
This demand was companyfirmed by the original authority, against which appeal before the Commissioner Appeals was preferred, who sustained the decision of the lower authority.
To answer the above companytroversy meaning of the words software, hard disk and platter need to be numbered See Computer Dictionary by Microsoft Fifth Edition at pp.489, 246 and 408 respectively Hard disk.
The department issued a show cause numberice for demanding duty on these goods in terms of Heading 84.71.
In the meantime, at Delhi, they had imported Laptop companyputers with Hard Discs preloaded with Software and claimed classification of the Software loaded Hard Disc Drives under Heading 85.24.
Most hard disks have from two to eight platters.
This order was upheld by the Commissioner Appeals as per Order in Appeal dated 25.11.2005.
These companyputers were also accompanied by separate Compact Discs CDs companytaining the same software, which were intended to be used in the event of Hard Disc failure.
See the illustration.
Hard disk drive n. See hard disk Platter.
A device companytaining one or more inflexible platters companyted with material in which data can be recorded magnetically, together with their read write heads, the head positioning mechanism, and the spindly motor in a sealed case that protects against outside companytaminants.
After examining the records and hearing both sides, CESTAT found prima facie case for the assessee in view of the Tribunals decision in the case of Barber Ship Management I Pvt.
Commissioner of Customs, Chennai that they would be filing Bills of Entry for separate assessment of Computers and Software loaded Hard Discs in view of the Tribunals decision in Barber Ship Managements case supra .
The Department has classified the laptop as a machine in CTH 84.71 and has demanded duty on the assessable value determined by deducting the software value from the total value of the laptop whereas the assessee has classified the software loaded Hard Disk Drive for short, HDD under CTH 85.24 separately from the laptop and has claimed the benefit of Notification No.21/2002 Cus dated 1.3.2002.
No.157 of Notification No.21/2002 Cus.
CIVIL APPEAL NO.
They had also provided a worksheet indicating separately the value of Hard Disc, value of Operating Software and the CD replicating charges.
One of the individual metal data storage disks within a hard disk drive.
It is on the basis of the appellate Commissioners order that the assessments were finalized.
An application seeking waiver of pre deposit and stay of recovery in respect of this amount of duty was filed.
Further, having heard both sides at length and having regard to the high stake involved in the case, the appeal was taken up for final disposal.
as well as the decision in the assessees own case reported in 2005 126 ECR 124 Tri Del and, accordingly, CESTAT have dispensed with pre deposit of the duty amount.
5854 OF 2006 Dr. ARIJIT PASAYAT, J. Challenge in this appeal is to the order passed by the Customs Excise and Service Tax Appellate Tribunal, South Zonal Bench, Chennai in short CESTAT allowing the appeal filed by the respondent.
See also hard disk.
By the impugned judgment CESTAT held that the Software loaded Hard Discs are classifiable under Heading 85.24 of the First Schedule to Customs Tariff Act, 1985 in short Tariff Act .
