Home Case Index All Cases Central Excise Central Excise + AT Central Excise - 2019 (3) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2019 (3) TMI 1092 - AT - Central ExciseValuation - inclusion of pre-loaded operational software in assessable value - essential software for computers - composite contract for supply of computers - Held that:- The basis for the proceedings initiated by the Department is that Chapter Note 6 of Chapter 85, which provided for separate assessment of preloaded software, was deleted and hence, the classification of software changed to Heading 8523 of the Central Excise Tariff Act, 1985 with effect from 01.01.2007. Thus, after 01.01.2007 software loaded on to the CPU has lost the eligibility for separate duty assessment and became assessable to duty as a part of the CPU and thereby part of the computer system. The judgement of the Hon’ble Apex Court in the case of Commissioner of Central Excise, Pondicherry Vs. M/s. Acer India Ltd. [2004 (9) TMI 106 - SUPREME COURT OF INDIA] has been greatly relied upon by the appellants. However, it is pertinent to take note that the facts of the said case relates to a period prior to the deletion of Chapter Note 6 of Chapter 85 of the Central Excise Tariff Act, 1985. In the present case, the software is preloaded in the CPU. Appellants do not manufacture software. The purchase order for the computer system is a composite one which is for supply of computer system preloaded with Windows XP (OS) and Antivirus software besides the service and installation at customer’s site - From the evidence tendered by the above witness as well as from the invoices, it is seen that the software is preloaded. The Ld. Counsel for the appellants has made a frail effort to argue that these are only testing software. Undisputedly, for activation and use of the computer this software is essential. The software is thus an integral part of the computer systems, though shown separately in the invoices. The value of the software has to be included in the assessable value for payment of Excise Duty. Revenue neutral situation - Held that:- The appellant has to pay Central Excise Duty on the assessable value arrived for the computer sets after including the value of software. Any service tax to be paid under ITSS services for Royalty has no connection or bearing with the liability to discharge Excise Duty. Therefore, the prayer of the appellant that they have paid service tax and that therefore the demand of duty under Central Excise law has to be set aside or adjusted, is without any legal basis and not acceptable. Demand with interest upheld - penalty set aside - appeal allowed in part.
|