TaxTMI Login
Just a moment...
Press 'Enter' to add multiple search terms. Rules for Better Search
of 
of 
No Folders have been created
Are you sure you want to delete "My most important" ?
NOTE:
of of 
All Case Laws
of of All Case Laws
Note
Bookmark
Share
Don't have an account? Register Here
of <h1>Touch screen kiosks qualify as 'computers' under tariff act, eligible for concessional duty rate</h1> The tribunal concluded that the touch screen kiosks in question met the definition of 'computers' under Heading No. 84.71 of the Central Excise Tariff Act ... Whether “Touch Screen Kiosks” are eligible for exemption u/not. 6/02 as “computers” – Assessee’s explanation that any add-on items like Coin Validator etc. would not make the Kiosks anything other than computer, is acceptable – if an ADPM (Automatic Date Processing Machines) such as laptop or note book can be accepted as computer, then kiosk can also be accepted – no need to apply common parlance as done by commissioner - kiosks are classifiable u/h 84.71 and eligible for exemption Issues Involved:1. Classification of 'touch screen kiosks' under Heading No. 84.71 of the Central Excise Tariff Act.2. Eligibility for concessional or 'nil' rate of duty under Notification No. 6/2002-CE.3. Interpretation of the term 'computer' as per the Explanation in the Notification.4. Relevance of common parlance versus technological parlance in classification.5. Validity of evidence and reasoning provided by the Commissioner.Detailed Analysis:1. Classification of 'touch screen kiosks' under Heading No. 84.71 of the Central Excise Tariff Act:The classification of the item was not in dispute, as both the department and the assessee classified it as an 'Automatic Data Processing' machine (ADP machine) under Heading 84.71 of the CETA Schedule. The Commissioner acknowledged that 'all computers are ADP machines, but all ADP machines are not computers.' The key issue was whether the kiosk in question could be classified as a 'computer' under this heading.2. Eligibility for concessional or 'nil' rate of duty under Notification No. 6/2002-CE:The appeal was against a demand of duty of over Rs. 99.00 lakhs and an equal amount of penalty for the period 2003-04 to 2005-06. The assessee argued that their kiosks, classified under Heading 84.71, should be eligible for concessional or 'nil' rate of duty as per Notification No. 6/2002-CE. The Notification specified that 'computers' under Heading 84.71 were eligible for this benefit, and the term 'computer' was defined to include CPU with monitor, mouse, and keyboard cleared together as a set but exclude input/output devices or accessories cleared separately.3. Interpretation of the term 'computer' as per the Explanation in the Notification:The Commissioner held that the kiosks were not 'computers' because they included additional items such as Coin Validator, MICR, Touch Screen, etc. The assessee contended that the kiosks included a CPU with monitor, keyboard, and mouse cleared together as a set, meeting the definition of a computer as per the Notification. The tribunal found that the kiosk housed all the essential components of a computer, including a CPU, monitor, keyboard, and mouse, and that the additional features did not disqualify it from being a computer.4. Relevance of common parlance versus technological parlance in classification:The Commissioner relied on common parlance to determine that the kiosks were not computers. However, the tribunal noted that technological parlance should prevail, especially given the fast-developing nature of information technology. The tribunal found that those associated with the technology, manufacture, and marketing of the kiosks would identify these machines as computers customized for special purposes.5. Validity of evidence and reasoning provided by the Commissioner:The tribunal found the Commissioner's reliance on statements from the General Manager (Procurement) of ELCOT and an EDP Assistant of M/s. Chennai Silks to be flawed. The ELCOT functionary, despite comparing the kiosks to common desktop computers, acknowledged that the kiosks were basically computers. The tribunal also criticized the Commissioner for rejecting certificates from Southern Railway and Rajiv Gandhi Shiksha Mission, which certified the kiosks as computers with add-on features, without valid reasons. Additionally, the tribunal found the reasoning that the higher price of kiosks compared to normal computers disqualified them from being computers to be unsound.Conclusion:The tribunal concluded that the kiosks in question met the definition of 'computers' under Heading 84.71 of the CETA Schedule and were eligible for the concessional or 'nil' rate of duty under Notification No. 6/2002-CE. Consequently, the demand of duty and penalty was set aside, and the appeal was allowed.
TaxTMI 
TaxTMI 
