TMI Blog2016 (2) TMI 1363X X X X Extracts X X X X X X X X Extracts X X X X ..... contended by the learned counsels for the Revenue. With the technology fast developing, it is now possible to do so and use Multi Functional Device with remote sensors in the computer system or Wi-fi. Therefore, actual and physical connection with the computer may not be even necessary - The dissection or separation of the various parts of this machine to decide the taxability of rate thereof, is not called for, but if admittedly, this device can be used as computer printer also, there appears to be no justification to tax it in the Residuary Entry, ignoring the specific entry relating to computer printers and its peripherals. It is well settled legal position that the Residuary Entry can be resorted to only if the commodity in question cannot be brought under the specific entries, and this proposition, is not disputed by either side before this Court. That as a matter of fact, the entry is wider, which includes not only computer printers, but computer peripherals also. This Court finds no justification in the contention raised by the learned counsels for the Revenue, that the word peripherals has to be construed narrowly to limit and include only accessories like, mouse, web ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arise. The revision petitions filed by the Assessees are allowed and the revision petitions of the Revenue are dismissed. - S.B. Sales Tax Revision Petition No. 24/2015 - - - Dated:- 19-2-2016 - Vineet Kothari, J. ORDER 1. The short, but an interesting question involved in these revision petitions is about rate of taxability of Multi Functional Device sold by the Assessee-Companies, which carry out the function of scanning, photocopier, fax machine and as computer printer, under the provisions of the Rajasthan Value Added Tax Act, 2003 (hereinafter referred to as the VAT Act ) enforced within the State of Rajasthan with effect from 01.04.2006. 2. The facts have been illustratively taken from S.B. Sales Tax Revision Petition No. 21/2010-Hewlett-Packard Hewlett Packard India Sales Private Limited v. Deputy Commissioner)-I, Commercial Tax Department, Jaipur and S.B. Sales Tax Revision Petition No. 24/2015-Kores (India) Ltd. v. The Assistant Commissioner Commercial Taxes, Anti Evasion, Rajasthan-1, Jaipur. All these cases were heard finally at this stage by consent of both the sides. 3. All these revision petitions are pertaining to the assessment of the Assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the ambit of specified entries. 84.71- 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. 8471.60- inputs or output units whether or not containing storage units in the same housing. 84.79- Machines and mechanical appliances having individual functions not specified or included elsewhere in this Chapter. 5. The relevant entries under the VAT Act, as prevailing for different periods, are also quoted below for ready reference 1. S. No. 65 F. 2(63) FD/Tax/2005-06 dtd. 01.06.2006 Computer System and Peripherals, Computer printers and electronic diaries. 2. S. No. 476 F. 12(22) FD/Tax/10-83 dtd. 09.03.2010 Computer printers excluding Multi Functional Devices. 3. S. No. 894 F. 12(11) FD/Tax/2013-111 dtd. 06.03.2013 Computer system and Peripherals, networking items for LAN and WAN including wires and wireless switch, routers, modems, webcams, IP surveillance system, computer printers including Multi Functional Devices and electronic diaries. 6. Mr. Alkesh Sharma, Mr. Sameer Jain with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e, and there is no justification of taking them out of these specific entries and treating the same as taxable under the Residuary Entry, which can be invoked and applied only when by no stretch of imagination, the commodity in question can fall under the specified entries. 8. Learned counsels for the Assessee-Companies also submitted that the controversy with regard to this very commodity under the provisions of the Customs Act and VAT Act has been decided by various Courts in the following judgments, which the learned counsels relied upon and they also urged that there is no contra judgment available, which holds that the said Multi Functional Devices are taxable under the Residuary Entry under the VAT law or Central Excise Act. In the first instance, learned counsels for the Assessee-Companies relied upon the following judgments of the Hon'ble Supreme Court: (i) Xerox India Limited v. Commissioner Of Customs, Mumbai, Mumbai, 2010 (260) E.L.T. 161 (SC), (ii) Canon India (P) Ltd. v. State of Tamil Nadu, 2015 (80) VST 483 (Mad.) (DB). (iii) State Of Tamil Nadu v. Cmc Limited, 2014 (75) VST 413 (Mad.) (DB). (iv) Xerox India Limited v. Commissioner Of Customs, Mum ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , or scanner, which produces digital image of the contents, which can be transmitted to the destination user, even through mobile phone, and therefore, there is no justification for treating the same as computer peripheral either. In the absence of the said commodity, not falling either within the definition of computer printers or computer peripheral, in the light of the specific legislative amendment by the notification dated 09.03.2010, in pursuance of the Budget Speech of the Hon'ble Finance Minister dated 09.03.2010, the Assessing Authority as well as the learned Tax Board cannot be faulted with, in holding that the commodity in question was taxable in the Residuary Entry @ 12.5% I 14%. They also urged that the case laws relied upon by the learned counsels for the Assessee-Companies under the Customs Act, where the entries were different and much wider then the entry in the VAT law, with which this Court is concerned, and therefore, those judgments are not applicable to the present cases. The learned counsels for the Revenue also submitted that the imposition of penalty was also justified in the present cases, since the Assessee-Companies deliberately paid the lesser rate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... owed, and the penalty in question deserves to be restored. 14. I have heard the learned counsels for the parties and perused the record, the judgments of the learned Tax Board impugned in these revision petitions as well as the judgments relied upon by both the sides on the aforesaid question. 15. In the considered opinion of this Court, the revision petitions filed by the Assessee-Companies deserve to succeed, while the revision petitions filed by the Revenue must fail. The reasons are as follows. 16. The Multi Function Device comprising of computer printer, fax machine, photocopier and scanner-all-in-one, with the fast technology development, is an office equipment, which combines the aforesaid three or four devices and functions in one unit, and is largely used while attached with computer, though it may be used in some respects, as stand alone equipment, or even with or without being attached to the computer, like fax machine, as a part of it. The scanner, which produces digital image of the documents canned can be used only with the aid of computers, if the scanned image has to be transmitted to any other destination, though such transmission can be made possible thro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ithin the umbrella of items and peripherals relating to computer system with effect from 06.03.2013, clearly shows that these products used as accessories and peripherals of computer system, definitely were not intended to be taxed in the Residuary Entry. 19. The period of assessment before this Court is even prior to such exclusion of Multi Functional Devices from the entry relating to computer printers and computer peripherals. By no stretch of imagination, such exclusion with effect from 09.03.2010, could affect the period prior to it, namely, between 01.04.2006 to 09.03.2010. On the other hand, the exclusion of Multi Functional Devices from the entry relating to computer printers and computer peripherals could imply that prior to 09.03.2010, these products were very much included within the ambit and scope of terms computer printers and computer peripherals . 20. the decision of the Hon'ble Supreme Court in the case of Xerox India Limited v. Commissioner Of Customs, Mumbai, Mumbai (supra) is of immense help in this regard. The Entry No. 8471.60 there, reads as under 8461.70. Inputs or output units whether or not containing storage units in the same housing. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unal, while considering the decision on which reliance was placed by the learned counsel appearing for the appellants, has stated that those decisions are distinguishable on facts without appreciating that in principle, the case cannot be distinguished. 15. In view of the above, we are of the opinion that the correct classification for the imported Multi-Function Machines involved in this case, namely, models Xerox Regal 5799, Xerox Work centre XD 100 and Xerox Workcentre XD 155df should be under the Customs Tariff Chapter Heading 84.71.60. Accordingly, the appeal is allowed and the order passed by the Tribunal in Appeal No. C/300/2002-B dated 5-11-2002 is set aside. Parties to bear their own costs. 22. Similarly, in the case of Canon India (P) Ltd. v. State of Tamil Nadu (supra), the Division Bench of the Madras High Court, in a case arising under the Tamil Nadu General Sales Tax Act, held that image runners (multifunction network printers) would fall under entry 18(i) of Part B of the First Schedule to the Tamil Nadu General Sales Tax Act, 1959 and would be taxable at 4%. The contention of the Revenue that image runner sold by the dealer could act as copier machine and oth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and serve as an input and output device and would partake the character of the peripheral , which includes printer and scanner. There was no question of classifying the goods under residual entry or under entry 14(iv) of Part D or entry 40 of Part D of the First Schedule to the Act. The assessing officer, Appellate Assistant Commissioner and the Tribunal had totally misconstrued the classification of goods by splitting the functions of the multi-function machine. What was relevant is the nature of the equipment and its predominant use. The goods in question partake the character of peripherals of a computer and therefore, were classifiable under entry 18(i) of Part B of the First Schedule to the Act. The clarification of the Authority for Clarification and Advance Ruling in terms of section 48A(3) of the Tamil Nadu Value Added Tax Act, 2006 was also binding on the Department. If entry 18(i) of Part B of the First Schedule to the 1959 Act provides a specific entry, there is no need to fall back on the residual entry. 24. In an earlier judgment in the case of State Of Tamil Nadu v. Cmc Limited (supra), the Division Bench of the Madras High Court, dealt with the case as to whe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s), Commercial Tax Department (supra), held that on applying the common parlance test, the history of the entry and even the fundamental/basic meaning of the terms spectacles as indicated in the various dictionaries, entry spectacles in the Schedule only relates to and covers corrective spectacles and the same could not include sunglasses (Rayban), as was sought to be argued by the Assessee and the concurrent findings of the Assessing Authority as well as the learned Tax Board did not require any interference by the High Court. The said judgment, with great respect, is of little help to the Revenue in the present cases, as not only the commodity in the present cases is absolutely different and different entries requiring contextual interpretation, have come up for interpretation before this Court, in the present cases, and therefore, the said judgment is found to be distinguishable and of little assistance to the Revenue. 28. The other judgments/orders of the learned Tax Board in the case of RICOH India Ltd. (supra) against which the revision petition filed before this Court is said to have been dismissed for want of prosecution, the detailed judgment of the learned Tax Boar ..... X X X X Extracts X X X X X X X X Extracts X X X X
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