COMMISSIONER OF CUSTOMS, BANAGALORE versus M/S, N.I. SYSTEMS (INDIA) P. LTD.

Citation: [2010] 8 S.C.R. 435 · Decided: 15-07-2010 · Supreme Court of India · Bench: S.H. KAPADIA · Disposal: Appeal(s) allowed
Open in Lexace · Ask the AI about this case
Judgment (excerpt)

[2010] 8 S.C.R. 435 
COMMISSIONER OF CUSTOMS, BANAGALORE 
A 
v. 
MIS, N.I. SYSTEMS (INDIA) P. LTD. 
(Civil Appeal No. 5394 of 2010) 
JULY 15, 2010 
[S.H. KAPADIA, CJI., K.S. RADHAKRISHNAN AND 
SWATANTER KUMAR, JJ.] 
B 
Customs Tariff Act, 1975 - Chapter 90, CTH 9032 - PX/ 
Controllers, Input/Output Modules, Signal Convertors and C 
Chassis and its parts -
Classification of -
Held: Are 
classifiable under chapter 90 -
On the basis of technical 
material including importer's own catalogue and webcast, 
Controllers (including embedded controllers) are not merely 
PCs/Automatic Data Processing Machines, but have a 
D 
specialized structure and specific functions to perform -
PACs!Programmable Process Controllers, 1.0. Modules and 
Chassis by themselves are not measuring, regulating or 
controlling instrument (system) - They are meant to operate 
as part of an industrial process control equipment/system, like 
E 
sensors -
Thus, are correctly classifiable as a part of said 
machine, instrument or apparatus under CTH 9032. 
F 
The 
assessee 
imported 
computer 
based 
instrumentation products from their Principal/Holding 
Company. The items were PXI Controllers, Input/Output 
Modules, Signal Convertors and Chassis and its parts. It . 
claimed the items to be computers and/or parts of 
computers and classified them under CTH 8471, 8473 and 
other headings falling under Chapter 84 of the Customs 
Tariff Act, 1975. The Original Authority held that the 
G 
subject goods were not structurally designed to function 
as a computer. They are measuring/controlling 
instruments, specifically designed for industrial use 
which is indicated from the catalogue submitted by the 
435 
H 
436 
SUPREME COURT REPORTS 
[2010) 8 S.C.R. 
A importer. The 0.A. classified embedded controllers, 
Programmable Automation Controllers, Data acquisition 
Boards, Digital Input Output Boards, PXI Chassis under 
Chapter 90. The Commissioner (Appeal) upheld the order. 
The tribunal held that the PXI Controller and other 
B Controllers are Automatic Data Processing Machine. PXI 
Controller is not a measuring instrument and can be used 
only in conjunction with an independent measuring 
instrument with suitable interface, thus not classified 
under chapter 90 of the Act. Hence the appeal. 
c 
Allowing the appeal, the Court 
HELD: 1.1 On the basis of technical material 
(including the importer's own catalogue and webcast) it 
is held that Controllers (including embedded controllers) 
D are not merely PCs/ Automatic Data Processing Machine, 
but have a specialized structure and specific functions 
to perform and are therefore, classifiable under Chapter 
90. The 1.0. Modules and Chassis are meant to operate 
as parts of Industrial Process Control equipments like 
E sensors. These 1.0. Modules come with software tailored 
to their specific pre-defined functions. Therefore, one has 
to see the package in the holistic manner. The package 
as a whole-both hardware and software, constitutes one 
single functional unit. Thus, 1.0. Modules and Chassis are 
F classifiable as parts and accessories of Automatic 
Regulating or Controlling Instruments/Apparatus under 
CTH 9032.90.00. Thus, the order passed by the 
Department was correct. [Paras 28, 29 and 46] [463-D-G; 
474-D] 
G 
2.1 On examination of the technical write-up, the 
purpose of Controllers whether embedded or not, is to 
control industrial processes. Programmable Automation 
Controller is the combination of PLC and PC technology 
and this means the ruggedness of PLCs, software 
H stability of a PC and the independence to incorporate 
COMMISSIONER OF CUSTOMS, BANAGALORE v. 
437 
N.I. SYSTEMS (INDIA) P. LTD. 
modular and diverse 1/0. PAC is an improvement over 
A 
PLC. PAC is capable of being controlled by a PC/Laptop 
but it is not a PC/Laptop. The principal function of 
Controllers is executing Control Algorithms for the Real-
time monitoring and control of devices, processes or 
systems whereas the principal function of a PC by itself 
B 
is acquisition, analysis and display of data. A controller 
performs functions in addition to data processing. The 
webcast presentation also shows the difference in the 
structure and functions of a Controller vis-a-vis a PC 
(simpliciter). The hardware in the Controller is dedicated c 
to perform Measurement and Control Applications. 
Basically, PACs are Programmable Process Controllers 
which are suitable for use principally in conjunction with 
Industrial Process Contro
Excerpt shown. Read the full judgment & AI analysis in Lexace.