TMI Blog2008 (5) TMI 92X X X X Extracts X X X X X X X X Extracts X X X X ..... hines (ATM, for short). One of these machines is designated as Personas TM 75 model [P75 model, for short] and the other machine is designated as Personas TM 77 model (P77 model, for short). During the material period, both these models were assembled out of imported components/parts. The period of such imports was covered by Notification No. 25/2005-Cus. dated 1-3-2005, whereunder parts intended for manufacture of ATMs were exempted from payment of Customs duty subject to the condition that the importer followed the procedure set out in the Customs (Import of Goods at Concessional Rate of Duty for Manufacture of Excisable Goods) Rules, 1996 vide Sl. No. 33 of the Table annexed to the Notification. ATMs falling under Heading 8472 90 in the First Schedule to the Customs Tariff Act were mentioned at Sl. No. 1 in the said Table. A variety of other goods falling under different Tariff entries were mentioned at Sl. Nos. 2 to 32 of the said Table. All these goods were exempted from the whole of the duty of Customs leviable thereon. At Sl. No. 33 of the said Table, goods falling under any Chapter of the said Schedule to the Customs Tariff Act and described as "all goods for the manufact ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n of the 'P77' machines as Automatic Bank Note Dispenser and denial of exemption to the imported components thereof. The Revenue's Appeal No. C/143/2007 is against the classification of the 'P75' machines as ATMs and grant of exemption to the imported components thereof. 4. All the appeals of 2007 are at final hearing stage, while the two appeals of 2008 are at 'stay' stage. There are two applications in each appeal of 2008, one for waiver of pre-deposit and stay of recovery and the other for out-of-turn disposal of the appeal. As all the appeals involve a common issue, we allow the miscellaneous applications filed in the appeals of 2008 and proceed to dispose of all the appeals. 5. That both the machines ('P75' and 'P77' models) are covered by Heading 8472 90 of the First Schedule to the Customs Tariff Act is not in dispute. The question is whether these machines can be considered to be Automatic Teller Machines (ATMs). It is submitted by the assessee that the 'P75' model is capable for meeting 13 different requirements of a customer while the 'P77' model can subserve as many as 11 of these requirements. Only one of these functions is cash dispensing. According to the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nks server issues an order through the ATM switch to the cash dispenser located inside the ATM. Based on this instruction, the dispenser picks up the currencies from various trays of different denominations and bunches together and presents it to a customer through a slot located on the front side of the ATM. 6. In the case of a depositing function, similar functions such swiping the card, recognizing the security codes, issuance of confirmation etc. takes place. Further, the ATM requests the customer to enter the amount to be deposited. Once this information is supplied by the customer through the high security keyboard, the ATM issues a suitable envelope automatically. The customer inserts the currencies into the envelope and places it into the depository slot provided on the front side of the ATM. Only when the banks' computer authorizes the transaction, the depository slot is opened and it pulls the envelope as placed by the customer automatically. Once this is received, the ATM issues a receipt which is the confirmation by the bank about the receipt of the envelope. It is made clear that none of the functions narrated above are performed manually and the checks an controls e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tory function of the said machines is not fully automatic inasmuch as counting of currency notes and credit of the cash to the customer's account remain to be done by the human teller in the bank. It is pointed out that a customer who deposits an envelope containing currency notes into a 'P75' machine does not get to know instantaneously the balance in his bank account. For this purpose, he has to visit the machine or the bank itself sometime later. To this extent, according to the learned JDR, the machine cannot be considered to be an ATM. 7. We have examined the records and considered the submissions. It is a fact admitted by the appellants and their Engineer (Manufacturing Engineering) that the 'P77' machine has no cash or cheque depositing facility. For this very reason, the machine cannot be recognized as an Automatic Teller Machine inasmuch as, as per the HSN, ATMs have cash depository function also. The Board's Circular No. 41/2002-Cus. ibid also recognizes ATMs as sophisticated machines which not only dispense cash but also perform other banking transactions like depositing cash, collecting cheques, bill payments, fund transfers etc. The Circular further clarifies t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s can, undisputedly, be accomplished with the 'P75' machine. Admittedly, the machine is also capable of dispensing cash and performing other banking transactions like fund transfer, bill payment, balance enquiry, mobile phone top up, airline ticket booking etc. Thus the 'P75' machine satisfies the requirements of an ATM in terms of the HSN, the Board's Circular and the manufacturer's catalogue on the product coupled with their Engineer's affidavit. However, we hasten to add that we are not impressed with the view in para 7 of Shri Dinesh Heber's affidavit, wherein he says that, for security reasons, banks are not willing to provide automatic credit facility as part of the depository function of ATMs. The literature produced by the learned counsel contains mention of 'future technologies', whereunder the facility of cheque/cash acceptance without using envelopes figures as one of the "future technologies", meaning thereby that technology has to advance further before an ATM can accept cash/cheque and credit it instantly to the customer's account without using envelopes or the aid of human agency. We, therefore, observe that Shri Dinesh Heber's averments contained in para 6 of his af ..... X X X X Extracts X X X X X X X X Extracts X X X X
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