Tariff classification for time recorders depends on independent data processing functions and the heading alleged in the notice.

Goods that do not perform independent automatic data processing functions cannot be classified under Heading 8471 merely because they interface with a computer; the Tribunal treated the time recording terminal as functionally comparable to earlier time recorders and found Heading 91.06 more appropriate. An excise demand also cannot be sustained on a tariff heading different from the one specifically alleged in the show cause notice. On these grounds, classification under Heading 8471 was rejected and the demand and penalty based on that classification were held unsustainable, with consequential relief following.

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Issues: Whether the time recording terminal was correctly classifiable under Heading 8471 as an automatic data processing machine or its unit, and whether duty could be sustained on a classification different from that proposed in the show cause notice.

Analysis: The Tribunal found that the product did not perform independent data processing functions in the manner required for Heading 8471 and that its factual character was identical to the time recorders considered in an earlier decision, where Heading 91.06 had been held more appropriate. The Tribunal also noted that the Department had not proposed classification under Heading 91.06 in the notice, and a demand could not be confirmed on a tariff heading different from the one specifically alleged. On that basis, the classification under Heading 8471 was rejected.

Conclusion: The machine could not be classified under Heading 8471, and the demand and penalty based on that classification were unsustainable. The appeal was allowed in favour of the assessee.

Final Conclusion: The duty demand and penalty were set aside, with consequential relief to follow.

Ratio Decidendi: An excise demand cannot be sustained on a tariff classification not proposed in the show cause notice, and goods lacking independent automatic data processing functions cannot be classified under Heading 8471 merely because they interface with a computer.

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