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Special drive for disposal of objections relating to mismatch of Annexure 2A/2B cases for the Assessment Year 2012-13.
November, 27th 2014

                          IN THE OFFICE OF COMMISSIONER
                         DEPARTMENT OF TRADE AND TAXES
                          GOVERNMENT OF N.e.T. OF DELHI
                             VYAPAR BHAWAN, NEW DELHI

        No.367 jCDVAT/2014j      2-'1   9
        Mj s. .Jagdeep & Associates (Legal Firm),
        A-36, Rajouri Garden,
        New Delhi - 110036.


        Present for the Applicant                Sh. A.K.Batra, CA '
        Present for the Department-              Sh. M.K.Aggarwal, Departmental
                                                                  Represen ta tive

                The above named applicant filed an application on 10/06 j 2014 under
        section 84 of Delhi Value Added Tax,Act,2004       (hereinafter referred to as the
        "said Act") and the ,question nut up for determination        under the aforesaid
        provision of law is as under: -

                ~;Whether sale of ,lvIicrophones shall be subject to levy of VAT at 5%
                under ScheduleIll of the DVATAct or at 12.5% under the Residual

        2.      The application has been filed by Mj s. Jagdeep & Associates (Legal
                Firm) L'"1 the prescribed   format   DVAT-42 and the requisite       fee of
                Rs.300f-paid   vide DD No, 920883 dated 04.06.2014 drawn on Kotak                  I


                Mahiridra Bank, Vishal Enclave, Delhi.                                             1.

        3.      Sh. A.K. Batra, C.A appeared on behalf of    Ml s.   .Jagdeep & Associates
                (Legal Firm) and reiterated   the facts and grounds      of the case and
                requested to determinethe   rare of tax payable on sale of Microphones.

4.   The brief facts of the case, as explained by the applicant are as under:-

     i)     One of the clients of the applicant proposes to start the business
            of trading of Microphones which can be used in· computers,
            computer peripherals, for speech and sound amplifiers and other
            allied products.         The usage of these Microphones by the end.
            consumer, at the time of its sale, will not be known.

     ii)    Earlier a similar question was raised by ~'f/ s Audio Centre for
            determination.     It was       PUt       up before the court "Is rate of VAT
            applicable   on      the    sale           of   Microphones      1S   4%".      Vide
            Determination No.127 /CDVAT/2006                     dated 08.08.2006 passed
            in the name of Audio Centre it has been determined that such
            Microphones which are used for Public Address System will not
            get covered under Schedule III of the DVATAct but under the
            residuary entryandwill          be charged @ 12.5%.

     iii)   Itwas   held that the Public Address Microphones are general
            unspecified goods and would attract tax                  at   the rate of 12.5% in
                                            DVATAct,. 2004.
            viewofthe Section 4(1)(e)olT.l.'-le

     iv)    Applicant further stated         ,-n<::t    similar issues have been examined
            by various courts wherein They held that a residuary entry is
            meant only for those categories of goods which fall outside the
            ambit of specified entries, meaning thereby that when a particular
            item has been specified 1;. The Schedule it will attract the rate of
            tax. specified     ill   that     schedule         and   in    the    instant   case
                                                     10) of Third Schedule
            Microphones are mentioned in entry 41 (A)(
            of the DVATAct, 2004.
   v)      Applicant further stated that 'Microphone' is a genus and the 'one
           used in products such as Computers, Mobile Phones etc.', are the
           species to it. Genus includes           the species of it.     Therefore,
           Microphone includes all type of microphones.          In the instant case,
           microphone is used in the computers and IT products and thus,
           is very well covered in the genus of the word 'Microphone'.

           With the above averments, he stated that Microphones which are
   specified under Schedule III of the DVi~,.T Act attract 5% VAT, whether
   the same are used in IT Products or for Public Address Systems and
   other allied products .:

o. The DR, on the other hand, argued that entry 41A of the Schedule III of
  DVATAct,2004, reads as under:

        51. No. i                   CO:i!YIODITY.
         41A i·     InformationTechnolOay-
                                         products -                        i
               I 10 I     Microphones,
                                     multimedia           headphones, I
               I     learphonesand combinehd ~crophonesJ speakersets andi
               !     ! _                 tt err pans.                   i

           The entry- of Microphones is not an independent entry bur the
  scope of the entry is restricted to the extent of the Microphones used in

 . IT products.         The intent   of the      legislature   is to include    those
  microphones which are minute and            CE.:l   be attached to the computers.
  The microphones which are used in auditorium, public gatherings or
 . theatres for addressing public meeting, concerts etc. are not covered in
  the entry. The genus in the instant case is IT products and its species is
  Microphone.       The sccpe of the entry do not cover Microphone in a
  general sense but it should be read         in   The limited sense in which it is
  mentioned.        Further,   the issue   has     already been decided        by the
  Commissioner, VATin the order dated 08.08.2006.

   6. I have heard both the sides and gone through the documents available
      on record and I am of the opinion that the intent of the legislature is to
     include only those Microphones which are used as IT products       and not
     to   include those microphones    which are used in auditorium,      public
     gatherings or theatres for addressing public meeting, concerts etc. and
     those are covered under section 4(1)(e) of the Delhi Value Added Tax
     Act, 2004 and attract tax @ 12.5%

  7. Held accordingly.

                                                          Commissioner , VAT

Copy for information and necessary action to:
  1. Applicant
  2 .· Addl. Commissioner (Law & Judicial)
  3. Addl. Commissioner (System)
  4. Programmer (EDP) for uploading this order on web.
  o. Value Added Tax Officer (Policy Branch)
  6. President, Sales Tax Bar Association (Regd.)
  7. Guard File

                                                          Commissioner,    VAT
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