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TMI Blog2014 (12) TMI 836X X X X Extracts X X X X X X X X Extracts X X X X ..... ntegral part of the mobile phone making it a composite good. - Merely, making a composite package of cell phone charger will not make it composite good for the purpose of interpretation of the provisions. The word 'accessory' as defined in the Webster's Comprehensive Dictionary (International) Volume-I. Assessing Authority, Appellate Authority and the Tribunal rightly held that the mobile/cell phone charger is an accessory to cell phone and is not a part of the cell phone. We further hold that the battery charger cannot be held to be a composite part of the cell phone but is an independent product which can be sold separately, without selling the cell phone. The High Court failed to appreciate the aforesaid fact and wrongly held that the ba ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e as quoted by the respondent-Company itself. It comes to ₹ 12,87,21,480/-. The scrutiny proceedings were initiated under Section 26 of the Act, 2005 read with Rules 36 and 43 of the Punjab Value Added Tax Rules, 2005 by issuing notice to the respondent separately for the Assessment Years 2005-06 and 2006-07. The Assessing Authority had held that the battery charger was an accessory chargeable to tax at the rate of 12.5%. The difference of 8.5% was calculated and it came to ₹ 1,09,41,325/-. Interest under Section 32(1) was charged on the said amount amounting to ₹ 21,25,491/-. Further penalty under Section 53 of the Act at the rate of 2% per month was imposed amounting to ₹ 85,01,964/- The total demand for the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ate i.e. 12.5% and not at concessional rate applicable to the cell phones inter alia on the premise that the respondents were selling more than one product which were exigible in different rate of tax in a single pack and had themselves admitted the battery charger as a separate commodity was liable to payment of tax at the rate of 12.5% applicable to the goods in residuary Schedule 'F' to the Act. The Assessing Authority further observed that even according to Entry 60 of Schedule 'B', the product included is only the cellular phone and not accessories thereof. 7. The respondent filed Appeal Nos. 804 and 805/2009-10 under Section 62(1) of the Act before the Deputy Excise & Taxation Commissioner(Appeals), Patiala Division, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s sold with the cell phone in same packing and hence tax chargeable was at the rate of 4% and proper tax had been paid and, therefore, there was no good ground to charge tax at the rate of 12.5% on sale of those battery chargers which are free with the cell phone in the composite package. 11. On the other hand, according to the counsel for the appellant-State a battery charger is not a part of the cell phone but merely an accessory thereof even as per the respondents themselves, who had separately paid tax at the rate of 12.5% on the battery chargers sold separately. According to him, the battery charges are not covered under Entry 60(6)(g) in Schedule 'B' of the Act and was thus liable to be taxed at the rate of 12.5% on its value ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d tariff no.8525.20.17 of the Central Excise Duty Act, is as under: Chapter 85 Sub-heading Code 8525 Sub-sub heading Code 8525.20.17 Tariff No.8525.20.17 Electrical machinery and equipment and parts thereof, radio-telegraphs sound recorders and reproducers and parts and accessories of such articles. Transmission apparatus for radiotelephony, radiobroadcasting or television, whether or not incorp. "Transmission apparatus incorporating reception apparatus Cellular Telephones 'Cellular telephone' is in schedule B at Entry No.60(6)(g) vide HSN Code No.8525.20.17. The Tariff No.8525.20.17 only relates to cellular telephone and not the accessories. The Schedule 'B' does not indicate that the cellular phone includes the ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... import tariff reads as follows: "3(b) mixtures, composite goods consisting of different materials or made up of different components, and goods put up in sets for retail sale, which cannot be classified by reference to (a), shall be classified as if they consisted of the material of component which gives them their essential character, insofar as this criterion is applicable." It was contended that composite goods being used consisting of different materials and different components, and goods put up in sets for retail sale, cannot be classified by reference to clause (a). However, such submission cannot be accepted as it cannot be held that charger is an integral part of the mobile phone making it a composite good. Merely, maki ..... X X X X Extracts X X X X X X X X Extracts X X X X
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