Mumbai Customs has dropped a customs duty demand of ₹23.63 lakh against M/s. Mehta Hitech Industries Limited (formerly Mehta Cad Cam Systems Pvt. Ltd.), holding that imported inkjet printheads used exclusively in the manufacture of inkjet printers capable of connecting to automatic data processing (ADP) machines are correctly classifiable under the specific tariff entry applicable to parts of such printers, and not under the residual tariff heading proposed by the Department. 

The order was passed by Ms. Usha Nilkanth Bhoyar, Additional Commissioner of Customs, Airport Special Cargo Commissionerate, Mumbai, while adjudicating a show cause notice issued following an audit objection. The Department had alleged that the importer had wrongly classified the goods to claim exemption from Basic Customs Duty (BCD), resulting in a short levy of customs duty. 

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Background of the Dispute

The dispute arose from the import of 12 consignments of inkjet printheads and related components through courier bills of entry during the audit period covering FY 2021-22 to FY 2023-24. The imported goods, including “Inkjet Printhead – Universal Damper” and “Inkjet Printhead – Vertical Damper,” had a total assessable value of approximately ₹2.43 crore. 

According to the Department, the importer had classified the goods under CTI 84439959, treating them as parts of printers eligible for exemption from BCD and paying only IGST. The audit, however, concluded that the goods ought to have been classified under CTI 84439990, attracting Basic Customs Duty at 7.5% along with Social Welfare Surcharge and IGST. On this basis, the Department alleged a short levy of ₹23,63,233 and invoked the extended limitation period under Section 28(4) of the Customs Act, 1962. It also proposed confiscation of the goods and imposition of penalties under Sections 112 and 114A. 

Importer Defended Classification

The importer argued that the imported goods were parts and components used exclusively in manufacturing inkjet printers that are capable of connecting to an ADP machine or a network. Since the finished printers themselves fall under HSN 84433250, their parts were correctly classifiable under CTI 84439959.

The company relied upon technical literature, product brochures, a Chartered Engineer’s certificate, CBIC Circular No. 11/2008-Cus., and judicial precedents including the decisions in Monotech Systems Ltd. and Aztec Fluids and Machinery Pvt. Ltd., which had recognized that parts of such printers are classifiable under the specific tariff entry applicable to printers capable of connecting to ADP machines. 

The importer further contended that the Department had failed to establish any suppression of facts or wilful misstatement and argued that the show cause notice was time-barred. 

Authority Examined Tariff Classification

While examining the dispute, the adjudicating authority observed that the entire case revolved around the correct tariff classification of the imported goods.

The order emphasized that under Note 2(b) to Section XVI of the Customs Tariff, parts suitable for use solely or principally with a particular machine are generally classified along with that machine. Therefore, the classification of the imported printheads depended upon the classification of the printers in which they were used. 

The authority noted that printers capable of connecting to an ADP machine or a network fall under Headings 844331 or 844332, while only those printers not capable of such connectivity fall under Heading 844339. Consequently, parts used exclusively in printers covered under Headings 844331 or 844332 would merit classification under CTI 84439959, whereas the residual tariff entry 84439990 could be invoked only if no specific classification was available. 

Reliance on CBIC Circular and Tribunal Rulings

The adjudicating authority placed considerable reliance on CBIC Circular No. 11/2008-Cus. dated 1 July 2008, which clarified that large-format inkjet printers capable of connecting to ADP machines are classifiable under Heading 84433250.

The order also referred extensively to the decisions of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) in Monotech Systems Ltd., where the Tribunal held that printers dependent upon computers for receiving print data and capable of network connectivity are correctly classifiable under Heading 84433250.

According to the authority, these decisions supported the proposition that the classification of printer parts follows the classification of the parent printer where the parts are solely or principally used in such machines. 

Department Failed to Produce Technical Evidence

A significant factor noted by the adjudicating authority was that the show cause notice did not contain any technical analysis demonstrating that the printers in question were incapable of connecting to ADP machines or networks.

On the other hand, the importer had produced brochures, technical literature and a Chartered Engineer’s certificate establishing that the imported printheads were exclusively used in printers that depended upon computers for their operation and satisfied the connectivity requirements prescribed under the tariff and explanatory notes. 

The authority observed that the Department had merely relied upon the audit objection without adequately examining the functional characteristics of the parent printers before proposing reclassification.

Proceedings Concluded in Favour of Importer

Holding that the Department had failed to justify reclassification under the residual tariff heading, the adjudicating authority concluded that the imported inkjet printheads were correctly classifiable under CTI 84439959 as declared by the importer.

As a result, the proposal to demand ₹23.63 lakh in differential customs duty, along with interest, confiscation of goods and penalties, did not survive.

The adjudication order thus brings an end to the proceedings initiated through Show Cause Notice No. C-73/2025-26 dated 14 October 2025, reaffirming that printer parts specifically intended for printers capable of connecting to ADP machines must be classified with the parent printers rather than under a residual tariff entry.

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