Exemption classification of touch-screen kiosks turns on the notification's defined meaning of computer, not common parlance.

Touch-screen kiosks with a CPU, monitor, keyboard and mouse were treated as computers where the exemption notification defined "computer" to cover a CPU cleared with monitor, mouse and keyboard as a set. Add-on functions such as coin validator, MICR, touch screen and printer did not change the machine's essential character as a customized computer. The notification-specific definition displaced any general common parlance test, so classification had to follow the express wording of the exemption entry rather than a broader trade understanding.

---

---

Issues: Whether the touch-screen kiosks manufactured and cleared by the assessee were computers falling within Heading 84.71 and eligible for the concession or exemption under Sl. No. 261 of Notification No. 6/2002-CE.

Analysis: The kiosks were found to contain a CPU, monitor, keyboard and mouse, with input, processing and output functions integrated in the machine. The Explanation to the notification defined "computer" to include a CPU cleared with monitor, mouse and keyboard as a set, while excluding only input or output devices cleared separately. The presence of add-on features such as coin validator, MICR, touch screen and printer did not alter the essential character of the machine as a customized computer. The common parlance approach was held to be inappropriate where the notification itself provided a specific definition, and the evidence relied on by the department was rejected.

Conclusion: The kiosks were held to be computers covered by the notification and therefore eligible for the concessional or nil rate of duty; the duty demand and penalty were unsustainable.

Ratio Decidendi: Where an exemption notification defines "computer" in specific terms, the machine must be classified according to that definition and not by a general common parlance test, and add-on functional features do not by themselves take a CPU, input and output set outside the definition of computer.

---