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TMI Blog2023 (1) TMI 184X X X X Extracts X X X X X X X X Extracts X X X X ..... arned AAG submitted that the Revenue is concerned only with the clarification of EVM machines in this appeal. After hearing learned AAG and Shri. Shivdass, learned Senior Advocate, in our view, following two questions arise for consideration: 1) Whether the Tribunal has erred in failing to follow the binding judgment of the Hon'ble Supreme Court in the case of the Commissioner of Customs /Vs/ N.I. Systems India Pvt. Ltd., which clearly holds that a commodity is ought to be classified as per its functionality and cannot be classified as an automatic data processing machine merely because the said commodity may contain an automated data processing machine? 2) Whether the Tribunal has erred in disregarding the functionality of the goods in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on claimed by the assessee and held that they are taxable at 14.5% under General Entry in terms of Section 4(1)(b) of the KVAT Act and imposed tax, interest and penalty. The Assessment Order was rectified on March 22, 2016 under Section 69 of the KVAT Act and the additional tax levied was corrected as Rs.3,73,89,773/-, interest as Rs.52,37,177/- and penalty as Rs.37,38,977/-. Accordingly demands were raised. Assessee challenged the said orders before the First Appellate Authority, the Joint Commissioner of Commercial Taxes and the said appeals VAT Ap.No.209/15-16 and CST Ap. No.133/15-16 dated 27.08.2016 stood dismissed. 5. On further appeal, by the impugned order, the KAT has partly allowed the appeal and set-aside the rate of tax at 14.5 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... based on the functions performed by them. Therefore, the EVMs must be regarded as data registering, data counting and displaying machines which cannot be categorized under ADPM; * the other items, viz., Radio Frequency Units, Signal Process Units etc., sold to HAL (Hindustan Aeronautics Ltd.,) have been rightly classified and taxed at residuary rate of 14.5% as they are not specified in any Notification. 7. With the above submissions, Shri. Dhyan Chinnappa submitted that the impugned order is unsustainable in law and prayed for allowing this appeal. 8. Shri. Shivdass, learned Senior Advocate for the assessee, supporting the impugned order, submitted that: * the EVM Machines fall under Serial No.4 of the Notification No. FD 116 CSL 200 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nscribing data onto data media in coded form and machines for processing such data, not elsewhere specified or included. 8471 90 00 - Other 14. The KAT has recorded that the relevant portion in the Notification at Sl. No.4 reads as follows: Sl.No. Heading and sub-heading No. Description 4 8471 Automatic data processing machines and units thereof; magnetic or optical readers, machines for transcribing data onto data media in coded form and machines for processing such data 15. In Chapter 85 an ADPM is described as under: "Note 5 of Chapter 85 defines the expression "automatic data processing machine" as under: "5(A) For the purpose of heading 8471 expression "automatic data processing machine" means a machine capable of : (i) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y the Central Excise Authority, the same is not disputable by the VAT Authorities. In Samsung India Electronics Pvt. Ltd., V/s. State of Gujurat 2020 (2) TMI 1247, relied upon by Shri.Shivdass, it is held that a Computer which contains additional function of calling feature and its principal function is that of Automatic Data Processing Machine does not cease to be an IT product. It is further held that the excise classification is binding on the VAT authorities. 19. Thus, it is not in dispute that EVM Machines are classified under 8471 and ADPM is described at Sl. No.4 in the Notification. It is also not in dispute that assessee has been clearing the EVMs under tariff item 8471. 20. The Gujrat High Court in Samsung India has held that th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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