TaxTMI 
TaxTMI 
2012 (6) TMI 603
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....99 during the period 1st April, 2005 to 31st March, 2007 are taxable under the residuary head and, therefore, attract value added tax @ 12.5% and do not fall under Entry No. 41A of the third Schedule of the VAT Act and, therefore, are not taxable @ 4%. 2. The substantial question of law, on which we have heard learned counsel for the parties and which requires adjudication, is as under:- "Whether the multi functional printers/machines and their spares and consumables, during the period 1st April, 2005 to 31st March, 2007, are taxable under Entry No. 41A of the third schedule of the Delhi Value Added Tax, 2004 or are taxable under the residuary head @ 12.5%?" 3. The appellant had filed an application under Section 84 of the VAT Act seeking advance ruling in respect of the applicable VAT rate on the multi functional printers/machines and their spares and consumables during the period 1st April, 2005 to 31st March, 2007 (hereinafter referred to as "the relevant period"). We may notice that the application and the question raised in the said application itself stated that the multi functional printers/copiers/scanners fall under the HSN code No.8471.60.29 and the spares and co....
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....ion 41 Computers, telephone and parts thereof, teleprinter and wireless equipment and parts thereof. 41A IT products notified by the Ministry of IT as specified below (I to XXII) x x x x x x x x x x x x (XXIII) computer systems and peripherals, Electronic diaries. x x x x x x x x x x x x " 8. Entry Nos. 41 and 41A underwent substantial changes with effect from 30th November, 2005 and thereafter during the relevant period, read:- "41. Computers, telephone and parts thereof, teleprinter and wireless equipment and parts thereof, Mobile phone and all mobile accessories costing upto rupees ten thousand. 41A. Information Technology products as per the description in column (2) below, as covered under the headings, or sub-headings mentioned in column (3), as the case may be, of the Central Excise Tariff Act, 1985 (5 of 1986)." Sl no. Description Central Excise Tariff Heading (1) (2) (3) 1. x x x x x x x x x x x x 2. x x x x x x x x x x x x 3. Automatic data processing machines and units thereof, magnetic or optical readers, machines f....
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....tation as provided in Note 2 shall apply." 9. Central Excise Tariff Headings had undergone one relevant amendment during the relevant period. In order to appreciate the controversy, the relevant changes, Section notes and Chapter notes are noticed and reproduced below:- Prior to 1st January, 2007 "8471 Automatic data processing machines and units Thereof; magnetic or optical readers, machines for transcribing data on to data media in coded form and machines for processing such data, not elsewhere specified or included. 8471 10 00 Analogue or hybrid automatic data processing machines. @ 16% 8471 60 Input or output units, whether or not containing storage units in the same housing. @ 16% 8471 60 10 Combined input or output units Printer @ 16% 8471 60 21 Line printer @ 16% 8471 60 22 Dot matrix printer @ 16% 8471 60 23 Letter quality daisy wheel printer @ 16% 8471 60 24 Graphic printer @ 16% 8471 60 25 Plotter @ 16% 8471 60 26 Laser jet printer @ 16% ....
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....rocessing unit either directly or through one of more other units; and (c) It is able to accept or deliver data in a form (codes or signals) which can be used by the system. (C) Separately presented units of an automatic data processing machine are to be classified in heading 8471. (D) Printers, keyboards, X-Y Co-ordinate input devices and disc storage units which satisfy the conditions of paragraphs (B)(b) and (B) (c) above, are in all cases to be classified and units of heading 8471. (E) Machines performing a specific function other than data processing and incorporating or working in conjunction with an automatic data processing machine are to be classified in the heading appropriate to their respective functions or, failing that, in residual heading. 6. Heading 8482 applied, inter alia, to polished steel balls, the maximum and minimum diameters of which do not differ from the nominal diameter by more than 1% or by more than 0.05 mm, whichever is less. Other steel balls are to be classified in heading 7326. 7. A machine which is used for more than one purpose is, for the purposes of classification to be treated as if its principal purpose were its sole pu....
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....ch satisfy the conditions of (ii) and (iii) above, are in all cases to be classified as units of heading 8471. (D) Heading 8471 does not cover the following when presented separately, even if they meet all of the conditions set forth in paragraph (C). (i) printer, copying machines, facsimile machines, whether or not combined; (ii) apparatus for the transmission or reception of voice, images or other data, including apparatus for communication in a wired or wireless network (such as a local or wide area network); (iii) loudspeakers and microphones; SECTION XVI 491 CHAPTER 84 (iv) television cameras, digital cameras and video camera recorders; (v) monitors and projectors, not incorporating television reception apparatus. (E) Machines incorporating or working in conjunction with an automatic data processing machines and performing a specific function other than data processing are to be classified in the heading appropriate to their respective functions, or, failing that, in residual headings. 6. .............. 7. A machine which is used for more than one purpose is, for the purpose of classification, is to be treated as i....
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....d in light of the submissions by the appellants, there has been no case made out for classification of the goods under the residuary heading 84.79.89. We may also notice that the Tribunal, while considering the decision on which reliance was placed by learned counsel appearing for the appellants, has stated that those decisions are distinguishable on facts without appreciating that in principle, the case cannot be distinguished. (15) In view of the above, we are of the opinion that the correct classification for the imported Multi-Functional Machines involved in this case, namely models Xerox Regal 5799, Xerox Workcentre XD 100 and Xerox Workcentre XD 155df should be under Customs Tariff Chapter heading 84.71.60. Accordingly, the appeal is allowed and the order passed by the Tribunal in Appeal No. C/300/2002-B dated 05.11.2002 is set aside. Parties to bear their own costs." 12. The contention of the appellant is that the aforesaid decision is squarely applicable and has been wrongly ignored and not applied by the tribunal. The contention of the respondent is to the contrary. Reference by both the parties was made to the four notes in the VAT Act applicable to Entry 41, which ....
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....he term "notification" is not with reference to the four notes, but the notification issued under the VAT Act. The reason is obvious that any good not covered by the notification would fall outside the scope of schedule III and would not be taxable @ 4-5%, but @ 12.5%. The aforesaid interpretation, gains strength and merits acceptance when we refer and interpret Note (4). Note (4) states that if the commodity or good falls under the heading or sub-heading "other" in the Central Excise Tariff Act, 1985, then interpretation stipulated in Note (2) would apply. In other words, the goods would be covered by the residuary provision and taxable accordingly. The word "heading" in Note (4) is superfluous as the word "other" never appears in the heading, but can be a sub-heading under the Central Excise Tariff Act, 1985. 14. Thus, Rule (1) is a general rule of interpretation and is not subject to Rules (2) to (4). Rules (2) to (4) require that we should examine the description in column (2) and compare it with the description of the goods mentioned in the relevant entry in the Central Excise Tariff Act, 1985. If the same are identical, then we should apply the same interpretation, as has ....
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....estion on case to case basis. 18. We have quoted above the relevant portion of the decision of the Supreme Court in Xerox India Ltd. (supra). In the said case, after applying the relevant notes or rule of interpretation, the finding recorded was that the multi functional machines therein had 84% or 74% parts of a computer printer and, therefore, it was held that they were output devices covered under Entry No. 8471.60. Therefore, in respect of the period prior to 30th November, 2005, we answer the aforesaid question of law recording that the multi function machines may or may not be computer peripheral, depending upon the main purpose or function which the machine was designed and manufactured to perform. If the principal and predominant purpose was to act as a computer printer or scanner or as an input or output devise of the computer, the multi functional machine would qualify and fall under entry 41A clause XXIII. However, if the machine was designed and manufactured for some other primary purpose, then it would not be covered by Entry 41A clause XXIII. Mere description or the nomenclature given by the manufacturer or trader is not relevant and the assessee should justify and....
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....der the sub-heading 8471.60.29. The multi functional machines/printers will not fall under any of the specific sub-heading, but would fall under the residual sub-heading 8471.60.29 i.e. "others". This is also clear when we examine the bills of entry, which have been filed by Canon India Private Limited, who have filed a writ petition before us and has been heard alongwith this appeal. In the said bills of entry, machines have been cleared under tariff entry 8471.60.29 i.e. "others". 20. As noticed above, Note (4) to the notification with reference to Entry 41A specifically states that it would not apply in case the goods fall under the sub-heading "others" in the Central Excise Tariff Act, 1985. In view of the aforesaid, we need not go into and examine the issue of amendment made in Entry No.8471.60 with effect from 1st January, 2007, whereby multi functional machines have been specifically classified under the tariff head 8443 and are no longer classified under the head 8471.60. Whether or not the reference in the notification issued under the VAT Act is "Legislation by Reference" or "Legislation by Incorporation" is not relevant and need not to be decided. We record that the m....