TaxTMI 
TaxTMI 
2018 (8) TMI 1378
X X X X Extracts X X X X
X X X X Extracts X X X X
....90 and the products mentioned at sr No 7 & 8 in the show cause notice are classifiable under chapter heading No 85254000 of the First Schedule to the Central Excise Tariff Act, 1985 (5 of 1986). ii. The show casue notice F No V-Adj (Misc) 30-36/08 dated 22.05.2008 which covers period from April 2004 to January 2007, demanding duty of Rs. 2,05,25,880/- (Rupees Two Crore Five Lakhs Twenty Five Thousand Eight Hundred and Eighty only) is hereby dropped, which is hit by limitaton and there is no suppression of facts on the part of M/s ISL. iii. The show cause notice F No V-Adj (Misc) 30-18/08 dated 05.03.08 which covers period from February 2007 to January 2008 demanding CE duty of Rs. 23,56,928/- (Rupees Twenty Three Lakhs Fifty Six Thousand Nine Hundred and Twenty Eight Only) is confirmed and recoverable from M/s ISL. iv. I do not impose penalty under Section 11AC of Central Excise Act, 1944 and/ or Rule 25 of Central Excise Rules, 2002 as explained supra. v. I impose interest under section 11AB of the Central Excise Act, 1944, at the appropriate rate applicable during the relevant period, The jurisdictional Assistant Commissioner, should work out the interest amount and i....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ting to Rs. 23,56,928/- (Rupees Twenty Three Lakhs Fifty Six Thousand Nine Hundred and Twenty Eight Only); 2.3 Commissioner has adjudicated the Show cause Notices, while he upheld the case of department on merits he dropped the demand raised by first show cause notice dated 22.05.2008 for the reason that extended period could not have been invoked. He confirmed the duty demanded as per the second show cause notice dated 056.03.2008 and also confirmed the demand for interest in respect of the duty demanded. 2.4 Appellants have challenged the order of Commissioner on merits against the confirmation of the duty demand whereas revenue has challenged the dropping of demand on the ground of limitation. Department has also filed cross objections (E/CO/32/09-MUM) in the appeal filed by the Appellant 2.5 Since both the appeals and cross objections are directed against the same order in original they have been clubbed and heard together and taken up for disposal simultaneously. 3.0 Have heard Shri R V Shetty Advocate for the Appellant and Shri V K agarwal Additional Commissioner (Authorized Representative) for the department. 3.1 Arguing for the Appellants learned counsel refe....
X X X X Extracts X X X X
X X X X Extracts X X X X
....he technical literature provided by the Appellant during the course of arguments. The said technical literature is reproduced below: 5.0 From the said technical literature it is quite evident that all the goods under consideration are standalone machines capable of performing a specific function. These machines/ equipments can be installed in remote locations for providing host of services to the users as highlighted in the technical literature. From the description of the products and functions performed it is quite evident that the said machine/ equipments are for performing various functions which are part of ordinary banking functions such currency dispensation, cheque deposits, bill payment etc., from a remote location without any human intervention. In table 3, a comparison of competing tariff entries has been made. Table 3: Competing Tariff Entries in which classification has been claimed. 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 847130 - Portable digital autom....
X X X X Extracts X X X X
X X X X Extracts X X X X
....oin-counting or wrapping machines Other: 84729091 --- Word-processing machines 84729092 --- Automatic typewriters 84729093 --- Braille typewriters, electric 84729094 --- Braille typewriters, non-electric 84729095 --- Other typewriters, electric or non-electric 84729099 --- Other 8525 TRANSMISSION APPARATUS FOR RADIO-BROADCASTING OR TELEVISION, WHETHER OR NOT INCORPORATING RECEPTION APPARATUS OR SOUND RECORDING OR REPRODUCING APPARATUS; TELEVISION CAMERAS, DIGITAL CAMERAS AND VIDEO CAMERA RECORDERS 852550 - Transmission apparatus: 85255010 --- Radio broadcast transmitter 85255020 --- TV broadcast transmitter 85255030 --- Broadcast equipment sub-system 85255040 --- Communication jamming equipment 85255090 --- Other 852560 - Transmission apparatus incorporating reception apparatus: --- Two way radio communication equipment: 85256011 ---- Walkie talkie set 85256012 ---- Marine radio communication equipment 85256013 ---- Amateur radio equipment 85256019 ---- Other &n....
X X X X Extracts X X X X
X X X X Extracts X X X X
....qually specific in relation to those goods, even if one of them gives a more complete or precise description of the goods. (b) mixtures, composite goods consisting of different materials or made up of different components, and goods put up in sets for retail sale, which cannot be classified by reference to (a), shall be classified as if they consisted of the material or component which gives them their essential character, insofar as this criterion is applicable. (c) when goods cannot be classified by reference to (a) or (b), they shall be classified under the heading which occurs last in numerical order among those which equally merit consideration. 4. Goods which cannot be classified in accordance with the above rules shall be classified under the heading appropriate to the goods to which they are most akin. 5. In addition to the foregoing provisions, the following rules shall apply in respect of the goods referred to therein: (a) camera cases, musical instrument cases, gun cases, drawing instrument cases, necklace cases and similar containers, specially shaped or fitted to contain a specific article or set of articles, suitable for long-term use and presented with....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ncipally used in an automatic data processing system; (ii) it is connectable to the central processing unit either directly or through one or more other units; and (iii) it is able to accept or deliver data in a form (codes or signals) which can be used by the system. Separately presented units of an automatic data processing machine are to be classified in heading 8471. However, keyboards, X-Y co-ordinate input devices and disk storage units which 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; (iv) television cameras, digital cameras and video camera recorders; (v) monitors and projectors, not incorporating television reception apparatus. (E) Machines incorpor....
X X X X Extracts X X X X
X X X X Extracts X X X X
....sing program which requires them to modify their execution, by logical decision during the processing runs. Thus machines which operate only on fixed programs, i.e. program which cannot be modified by the user are excluded even though the user may be able to chose between a number of such fixed programs. ....... (B) Separately Presented Units Subject to the provisons of Notes 5(D) and (E) to this Chapter, this heading also covers separately presented constituent units of automatic data processing systems. These may be in the form of units having separate housing or in the form of units not having a separate housing and designed to be inserted into a machine (e.g. insertion onto the main board of a central processing unit). Constituent units are those defined in Part (A) above and in the following paragraphs, as being parts of a complete system. An apparatus can only be classified in this heading as apart of an automatic data processing system if it: (a) Performs data processing function (b) Meets the following criteria set out in Note 5(C) to this Chapter: i. It is of a kind solely or principally used in an automatic data processing system; ii....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... Tariff Act, 1985 which is totally akin to the Chapter Note 5 to Chapter 84 of HSN has been taken into account along with the specific terms of various headings and subheadings in the said chapter of Central Excise Tariff and HSN. 11. Now the items mentioned at Sl No 7 & 8 in table 1 namely I-Watch (Digital ATM Surveillance Solution) & Iwatch DVR (Digital Video Recording) are taken up for discussion to determine their classification. Appellant has in his letter dated September 11, 2003 explained the functions and characteristics of the said products as follows: • DVSS has been perfected to capture the transaction details of the person like Credit/ Debit card number and emboss it on the image captured along with the date and time stamp. • Fraud detection can be done by just punching in the card number and all images pertaining to the transactions will be displayed for immediate redressal. • The solution can be viewed locally or it can be viewed on LAN/ WAN • The DVSS can be centrally monitored that is if the camera of a remote ATM has been tampered with it will send an error message to Central Location Indicating a problem. ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... the Board. It is clarified that computers are essentially data processing machines and their function is to process analog or digital data. There may be machines, which use such processed data to perform certain specified functions. These machines may involve processing of data but their principal function is not processing of data per se, but using such processed data for performing independent functions. These are not "computers" but are computerised machines. ATM is one such machine. For the purposes of Customs Tariff also, whereas computer falls under heading 84.73, ATMs fall under sub-heading 8472.90. 13. In his submissions Appellant has heavily relied on the decision of Tribunal in case of i. HCL Peripherals Vs Commissioner [2008 (229) ELT 547 (T-Chennai)]. From the facts as recorded in the para 2 of the said decision it is evident that classification of the product namely touch screen kiosk was not a dispute under consideration of the bench. Both department and party had classified the item as Automatic Data Processing Machine under heading 8471. Since the issue in present case is with regards to classification of the specific products listed in table 1, same is clear....
X X X X Extracts X X X X
X X X X Extracts X X X X
....1). In view of the adjudicating commissioner every fact was well in knowledge of the department and hence there is no case of suppression, misstatement etc against the party. Department being aggrieved by this part of the order is in appeal has come in appeal before us. The ground of appeals being that party has during the period January 2004 to January 2007 suppressed the facts regarding description of goods cleared so as to enable them to avail the exemption/ concession under notifications 2/2004-CE and 6/2006-CE. In their appeal department has also challenged non imposition of penalty by the adjudicating authority under Section 11AC. 16. In para 30 onwards of the order adjudicating authority has dealt both the issues by observing as follows: "30. So far as suppression is concerned as alleged by the department, this issue has been further examined in depth in terms of replies to the show cause notices, written submissions as well as submissions made during the personal hearing. It is observed that when M/s ISL obtained its first registration they vide their letter reference No ISM/RK/EX/10-2003/11 dated 11.09.2003 addressed to Deputy Commissioner of Central Excise Division ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....rtment from time to time. In view of the above position I am of the opinion that there is no willful intention to suppress the facts or information from the department by the assessee, in respect of the products manufactured and cleared by them during the relevant period in question. Thus the demand for more than one (1) year raised by the department is hit by limitation. Therefore, proviso to Section 11A(1) cannot be invoked in this case. 32. The department vide its letter dated 29.01.08, has informed M/s ISL about correct classification of the products manufactured by them and directed to pay the CE duty at full rate i.e. 16% adv and M/s ISL, immediately after receipt of directions from the department started paying the CE duty. The show cause notice has been issued to M/s ISL on 05.03.08. Thus it is clear that M/s ISL, has started paying the CE duty at full rate i.e. 16% adv., even before the issue of instant show cause notice. The Hon'ble CEGAT in the case of M/s Rashtriya Ispat Nigam Ltd. - reported in 2003 (161) ELT 285 (T) has held that penalty is not imposable under section 11AC or under Rule 173Q when duty is deposited before issue of the show cause notice. I therefore,....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... Increased wages... Shrinking margins... Telecom and utility companies face an increasing shortage of quality manpower and infrastructure amidst an ever growing customer base. Self-service technologies from Intelivisions enables telecom companies to reduce the cost per transaction while providing consistent improved service levels across all retail outlets. Flexible Payment Options Cash Cheque Card PAY ASK 24-7 dalone Self service Bill Payment, Cellphone recharge, Content download & more Intellvisions self-service terminals are designed to automate routine transactions. It comes with a list of configurable payment options using cash, cheques and cards SERVICES Service Provisioning: activation of roaming facility, ISD facility, etc Bill Enquiry and Payment: enquiries for outstanding bills and payment of utility, rental and mobile bills *Media Manager Feature: streaming of advertisements on screens and generation of location and time-based advertisements, programmable to individual kiosks âš« Content Download: downloads of games, ringtones, screen savers and wallpapers Video Help Desk: in-built camera....
X X X X Extracts X X X X
X X X X Extracts X X X X
....rencing to answer service related queries Marketing Tool- i-Serve (SBT) fully automates the three steps product information, product research and transaction providing opportunities to up sell and cross sell products "Revenue Generation- additional revenues by offering bill payment and e-top up services for utilities and cell phone companies CARD READER VANDAL PROOF KEYBOARD ENCRYPTED PINPAD BULK NOTE ACCEPTOR Document 4 BENEFITS AND APPLICATIONS Banking Retail ASK Effectively manage space in branches Migrate routine transactions like cheque/ cash deposits, loan processing, teller queries to the self-service channel Meet the challenges of competition and increase customer base Fulfill the promise of true anytime, anywhere and anyplace banking Increased selling opportunities for financial products Provide detailed product demonstrations â– Generate on-the-spot customer surveys â– Reduction in distribution cost of coupons â– Provide convenient touch points for customers to access mall directory, promotion schemes Easy access to discount coupons and loyalty programs Provide additional chan....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... No frustrating queues or human interaction ■Superior service experience Printed acknowledgment receipt "Reduced time lag between cheque presentation and realization Document 6 STANDARD CONFIGURATION 15"/17" LCD with touch screen, bigger size available on request. CPU option: Commercial grade/Industrial grade CPUs OPTIONAL ACCESSORIES Vandal proof keypad (optional) ■CCD Camera Keyboard ■CCD camera Magnetic Card reader 80mm Thermal receipt printer •Keyboard CCD camera Magnetic Card reader 80mm Thermal receipt printer ■Keyboard ■CCD camera Magnetic Card reader 80mm Thermal receipt printer OPTIONAL ACCESSORIES • CCD camera 80mm Thermal receipt printer Magnetic card reader CCD barcode reader Cash acceptor Bin 20" overhead LCD www.intellvisions.com Intellvisions INDIA - Corporate Office INTELLVISIONS Software Limited ■80mm Thermal receipt printer Magnetic card reader Cheque acceptor Cash acceptor ■CCD camera ■80mm Thermal receipt printer Magnetic card reader Cheque acceptor MICR scanner/ Endorser/Sta....
X X X X Extracts X X X X
X X X X Extracts X X X X
....24*7 basis. Facility of paying their bills for any amount of utility service providers at any time of the day. Customers are freed from the hassle of standing and waiting in long queues. Increases customer-reach and customer-retention by offering value-added services Bank generates additional revenue on" per-instrument" basis and float cash. Automated process eliminates data entry has to be done to process cheques. Transaction Time - Below 30 seconds. Banking Kiosk / Information Kiosk • Information Display Balance enquiry and other banking functions • Can print Long/Short/Balance Statements . Cheque Book Request/Cheque Book Enquiry • Pass Book printing facility d) The Assembly is done by hardware engineers. e) The software is installed by the software engineer in every appliance. f) The quality testers test the quality for hardware and software prior to packing and dispatch. Note: The detailed functionalities of these above machines are described in the various literatures, which we have enclosed for your reference. It will be thus evident that the product merits classification under ....