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2015 (2) TMI 751 - HC - VAT and Sales TaxClassification of goods - Rate of tax applicable - Levy of tax on Image Runners @4% or @12% - Whether the Image Runners (Multi-function Network Printers) sold by the assessee are to be classified under Schedule I, Part B, Entry 18(i) as claimed by the assessee or under Schedule I, Part C, Entry 13(i) as held by the Tribunal - Held that:- Goods in question are "peripherals" to a computer working in conjunction with the computer. There is no question of classifying the goods under residual entry or under Entry 14(iv) of Part D or Entry 40 of Part D of Schedule I of the TNGST Act. - The importer therein primarily contended that the predominant function of the machine is printing documents along with scanner, which is an input and output device and therefore the classification sought for by the importer was correct. After discussing various heads under which the classification was contested and placing reliance on Note 5 of Chapter 84 and Rules relating to General Rules of interpretation of the first schedule, the Supreme Court came to hold that the goods imported, namely, multi-functional machines, serve as input and output device of ADPM (computer) and therefore, classifiable under Heading 8471.60 of the Act. The Authority for Clarification and Advance Ruling placing reliance on the notification issued by the Government of India, Information Technology Department in G.O.No.3, CT & R (B1) Department, dated 1st January, 2007, interpreted Entry 68 Part B item No.22 and came to hold that multi-function device is an office machine connected to a computer and it acts as a combination of one or more devices, namely, fax, photocopier (xerox), printer and scanner. - The fact that the goods in question work in conjunction with a computer, personal, mini, mainframes and laptops of analog and digital varieties is not in dispute. It is also not in dispute that this equipment is an input and output device. The printer and the scanner of different kinds fall within the definition of "peripheral". If it is a standalone photocopier machine or fax machine, then the Department would have a case and counter. Photocopying is not the primary function of the equipment in question, as it works in conjunction with the computer. The distinction is evident from the reading of Entry 18(i) of Part B of Schedule I and Entry 14(iv) of Part D of Schedule I of the TNGST Act. Peripherals in relation to computer personal, mini, mainframes and laptops of analog and digital varieties would fall under Entry 18(i) of Part B of Schedule I, whereas Electronic instruments including cash registers, tabulating and calculating machines, electronic duplicating machines, reprographic copiers including duplicators, xerox and photo copying machines and any other electronic apparatus for obtaining duplicate copies fall under Entry 14(iv) of Part D of Schedule I. On considering the functions of the Image Runner in the light of the decisions, referred supra, we are of the firm view that the goods in question are "peripherals" and the function of printing of documents based on a command given by the computer in the form of digital signals transmitted through networking device, namely, Local Area Network (LAN), makes it ample clear that it serves as an input and output device and therefore, it would partake the character of the "peripheral , which includes printer and scanner. - goods in question are "peripherals" to a computer working in conjunction with the computer. There is no question of classifying the goods under residual entry or under Entry 14(iv) of Part D or Entry 40 of Part D of Schedule I of the TNGST Act. Nature of the equipment and its predominant use. In this case, the Image Runner is an equipment, which is an input and output device that works in conjunction with the computer and also has got scanning facility for the very same function of input and output device and therefore, it is clearly a "peripheral". - Image Runner is an equipment, which is an input and output device that works in conjunction with the computer and also has got scanning facility for the very same function of input and output device and therefore, it is clearly a "peripheral". 'Router' is a device falling outside the main part, namely, computer and it is partially or completely dependent on the host and expands the capabilities of the computer and it does not form part of the core architecture. What are all computer peripherals have not been defined in Serial No.22 of Entry 68 of Part B of I Schedule to TNVAT Act, 2006. Therefore, whatever goods, which are falling within the definition of 'peripheral' would be entitled to such a benefit. We find that 'router', from the nature of its use in conjunction with the computer as has been defined by the Appellate Deputy Commissioner and the Tribunal based on relevant computer related dictionary and data, is a peripheral of a computer. It is also held by the Tribunal that 'router' is a computer network device that transmits data from one area to another and expands the capabilities of the computer, hence, it does not form part of core computer architecture. Therefore, we find that the Appellate Deputy Commissioner as well as the Tribunal are justified in holding that the goods sold by the assessee, namely, router, is a computer peripheral, falls under Serial No.22, Entry 68 of Part B of I Schedule of TNVAT Act, 2006. Goods in question partake the character of "peripheral" of a computer and therefore, it is classifiable under Entry 18(i) of Part B of Schedule I of TNGST Act. - Decided in favour of assessee.
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