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2017 (5) TMI 1808 - HC - VAT and Sales TaxClassification of goods - sale of Multi Functional Devices (MFD) and Facsimile Machine (FM) - taxable at the rate of 4% or 12.5%? - levy of penalty - HELD THAT:- The functioning of “FM” becomes operative only when there is a telephone line/connection and unless there is a telephone line/connection, “FM” as it stands, will not be viable. The “FM” would certainly can be said to be covered under entry 7 of Schedule-IV reproduced hereinbefore. It is a case where “FM” as noticed hereinbefore becomes operative only when there is a telephone line/connection and unless and until there is a telephone line/connection, “FM” does not operate. Therefore, it has been held to be falling in the entry 7 of Schedule-IV of the RVAT Act, and I concur with the reasoning of this court. Merely because “FM” specifically has not been included in entry 7, is no reason to infer that it will fall in Schedule-V. Once the claim of the assessee is that it fall under entry 7 Schedule-IV, then the revenue has to bring material on record, which has not been brought on record. The finding reached by all the three authorities appear to be unjust and accordingly the finding reached by all the three authorities is reversed and it is held that “FM” will fall in entry 7, and the claim of assessee is just and proper and allowed. Penalty - HELD THAT:- Once the claim of assessee has been accepted that it was liable to a rate of 4% only, therefore, question of penalty does not arise. Even otherwise, it is case where the matter was relating to classification of entries - The Apex Court in the case of Shree Krishna Electricals (supra) and this court in COMMERCIAL TAXES OFFICER, ANTI-EVASION, ZONE-II, JAIPUR VERSUS BAMBINO AGRO INDUSTRIES LTD. [2015 (9) TMI 1504 - RAJASTHAN HIGH COURT] and in some other cases, has also taken a consistent stand that in a case of classification, question of penalty does not arise. Admittedly, though survey has been conducted, but the Revenue has not been able to pin point or find any defect in the sales version, except whether rate of 4% is leviable or 12.5%, thus, the petitions of Revenue in this regard also stands dismissed. This court in the case of CTO v. M/s. Bambino Agro Industries Ltd., has held penalty not leviable. The petitions preferred by the assessee stand allowed, while the petitions preferred by the Revenue stand dismissed, with no order as to costs.
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