DRAFT CIRCULAR

Extension of benefit of Notification 21/2002-Cus., dated 1.3.2002, S.No. 276 to Computer Casing and Power Supply Unit imported together-reg.
There is a dispute regarding the extension of benefit of Notification 21/2002-Cus., dated 1.3.2002, S.No. 276 to computer casing and power supply unit imported together, has been brought to the notice of the Board.

2. Under Sl. No. 276 of the CN.21/2002-Cus., dated 1.3.2002, all parts of the machines of heading 8471, other than PPCB’s, motherboards and power supply units attract a concessional rate of duty @ 5%. In case the computer casing/chassis is pre-fitted with the power supply unit, it is not eligible for the benefit of the said entry of the notification and the rate of duty on the same becomes 15% basic. However, some importers import the chassis and the power supply as separate units in the same consignment. These units are meant to be fitted together after the clearance thereof, but in the form as presented, these are not assembled. The point of dispute is whether in cases where computer casing/chassis and power supply unit are imported in a form not fitted together as an assembly, but separately in the same consignment, the benefit of Notification No. 21/2002-Cus., dated 1.3.2002, (vide S.No. 276) can be denied by applying rule 2(a) of the General Rules for the Interpretation of the First Schedule (GIR).

3. This matter was discussed in the Tariff Conference of Chief Commissioners of Customs held at Visakhapatnam on 25th and 26th September, 2003[Agenda Item A-17].

4. The Conference noted that there are several rulings of CESTAT that for the sake of denial of the benefit of a notification, Rule 2 (a) cannot be invoked.

5. The Board has accepted the decision of the Conference. Accordingly, it is clarified that the goods have to be classified in the form as presented and rule 2 (a) of the GIR cannot be applied for the sake of allowing/disallowing the benefit of a notification, unless the exemption notification is based on classification of the item under a particular heading of the Customs Tariff. For the purpose of classification, Rule 2(a) of the General Rules of Interpretation could be applied.

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