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TMI Blog2015 (6) TMI 995X X X X Extracts X X X X X X X X Extracts X X X X ..... eading Nos. 8470.00, 8473.20 and 8470.00 up to 31-3-2004 and paying duty at the rate of 16% ad valorem. From April, 2004 onwards, ATL changed the classification of all these products to Chapter sub-heading No. 8471.00, as computers and cleared them on payment of duty at the rate of 8% ad valorem up to 8-7-2004 and at nil rate of duty thereafter availing exemption in terms of Sl. No. 265 of Notification No. 6/2002-C.E., dated 1-3-2002. 2. In the impugned order, the Commissioner took a view that the classification adopted by the ATL was correct and dropped the demand and proposal for reclassification. Revenue is in appeal. 2.1 The first item PC lite is a DOS based computer for meter reading. This machine is exclusively used for ' ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ut device is 30 key pad and output device is a 80 character LCD with built-in printer. The programming/application language namely 'C' is supported by Micro 'C' operating system. In the flash disk, BIOS and the operating system are loaded. Application software can be developed by the user in any high level language like 'C' and the product is thus user programmable. Diversified and different application programmes (5 to 8) can be stored in this machine. It has independent automatic data processing capacity. It is capable of taking logical decisions during the execution of programmes without human intervention. In respect of both these items, it has been contended by the Revenue that even though these machines can store many diverse applica ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... can perform only one function at a time even though it has got diverse software. Where the machine can perform diverse functions, it is the submission of the Revenue that even though it is capable of diverse applications, it cannot be considered as having a universal application usage. Moreover, as per the Chapter Notes of Chapter 84 according to Chapter Note 5(a), the expression 'automatic data processing machine' means : (i) Digital machines, capable of (1) storing the processing programme or programmes and at least the date immediately necessary for the execution of the programme; (2) being freely programmed in accordance with the requirements of the user; (3) performing arithmetical computations specifi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e with personal computer, this would mean that these products are compatible with a personal computer. The notice on this basis states that these machines are working in conjunction with the computers. The assessee contends that all it means is that the programmes are transferable from a personal computer to these machines and vice versa. The question is whether the ability to work together with a computer should be understood to be the ability to work only on the basis of a computer with the machine incapable of performing this function otherwise. In the present case these machines are themselves computers inasmuch as they answer the description of an automatic data processing machine as mentioned in Chapter Note 5(a) of the Chapter 84. An ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts under Ch. S.H. No. 8470.10. The notice also refers to these products as accounting machines and similar machines incorporating calculating devices. It is not clear of the three machine which were to be dealt as the accounting machines. However, the explanatory notes to the account machines also state that the structure of accounting machines is appreciably the same as that of calculating machines. In addition to manual input arrangements for variable data (e.g. Debit/Credit operations), like calculating machines, they may be fitted with devices for reading punched cards or tape, magnetic tape or cards, etc., to introduce recurrent data or preset data. Here also since it is similar to calculating machines, same logic that excludes these m ..... X X X X Extracts X X X X X X X X Extracts X X X X
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