1996 (9) TMI 392 - AT - Central Excise

Summary

Issues:
- Whether peripheral devices cleared along with computers are eligible for exemption under Notification No. 254/77-C.E. dated 22-7-1977.

Analysis:

The appeal before the Appellate Tribunal CEGAT, New Delhi involved a dispute regarding the eligibility of peripheral devices for exemption under Notification No. 254/77-C.E. dated 22-7-1977. The central issue was whether peripheral devices, when cleared along with computers, are covered by the exemption. The relevant Tariff Item No. 33DD of the Central Excise Tariff included the description of goods as "Computers (including Central Processing Units & Peripheral Devices) all sorts." The exemption under the notification applied to computers sold to educational and research institutions, subject to certain conditions, including the production of a certificate from the Department of Electronics. The Collector of Central Excise (Appeals) had held that the exemption was available to computers with peripheral devices, contrary to the Assistant Collector's view. The Collector's order emphasized that computers without peripheral devices would not serve all purposes of a computer, supporting the inclusion of peripheral devices for exemption.

The respondents, M/s. Ultra Business Machines Pvt. Ltd., requested a decision on the merits of the matter. The Revenue contended that since the exemption notification referred only to "computers," peripheral devices were not covered. The Revenue argued that exemptions are typically worded differently when specific items are intended to be covered. However, the Tribunal examined the language of Tariff Entry No. 33DD and the wording of the exemption notification. While the notification mentioned only "computers," the Tariff Entry explicitly included central processing units and peripheral devices. The Tribunal interpreted the inclusion of peripheral devices as a clarification or extension of the main goods, considering that a computer cannot function without a central processing unit. Therefore, despite the notification not explicitly mentioning peripheral devices, the Tribunal concluded that the exemption applied to both central processing units and peripheral devices.

Ultimately, the Tribunal found no error in the Collector of Central Excise (Appeals)'s decision and rejected the Revenue's appeal. The judgment clarified that the exemption under Notification No. 254/77-C.E. covered both central processing units and peripheral devices, based on the specific inclusion in the Tariff Entry.