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2017 (7) TMI 406 - AT - Central ExciseValuation - clearance of manufactured computers after pre-loadingh with Application Software - misdeclaration of value - Department took the view that appellant actually preloaded the software into the computer and cleared the same; that they had made a wilful misstatement that they were deducting from the value of (of the computers) the actual cost of software; that however they had deducted more than such actual cost with the intent to evade duty of excise on the computers - time limitation - Held that: - the period between the appellant's letter dt. 25-08-2000 (referred to in the SCN) or for that matter, the date of recording of statement from Shri Ravishankar namely, on 20-06-2001, and issue of SCN is well beyond normal period of limitation. We are unable to fathom the reasoning for this inexplicable delay on the part of the department to initiate adjudication proceedings, especially when no new material or facts have been unearthed by them other than the said letter of the statement. Such delay cannot sought to be covered up by invoking suppression when there was no suppression, or while invoking misstatement, of which also we do not find any evidence. This being so, the proceedings initiated against the appellant are clearly hit by limitation and the appellant will succeed on this ground alone - the impugned order will have to be set aside on the ground of limitation proceedings being hit by limitation. On merits also, Deduction of software cost has to be on the basis of amount equivalent to market prices of the comparable product, that the cost of operating software was not the cost of CD alone but other costs such as royalty, warranty, after-sales service etc. are to be taken into account, that the intrinsic value of software is to be calculated by taking into account not only the purchase price but other costs, and that department charged that appellant overstated the value of software in undervalue the computer do not stand on firm ground. Reliance was placed in the case of Birla Corporation Ltd. Vs CCE [2005 (7) TMI 104 - SUPREME COURT OF INDIA]. Appeal allowed - decided in favor of appellant.
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