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2021 (10) TMI 889 - AT - Central ExciseValuation - inclusion of value of software in the assessable value during clearances of telecom equipment or not - want of necessary evidences - period involved is from March 2005 to January 2006 - HELD THAT:- The Commissioner (Appeals) has not gone into the details as to whether the software is only an operational / application software, as contended by the respondent, whether the software is an integral part of the telecom equipment/hardware without which the telecom equipment cannot function. In paragraph 4.2 of the impugned order, it is merely stated that “the telecom equipment can function without the usage of said Network Management Software”. This finding is not seen supported by discussion of necessary evidence. If the software is operational / application software, the decision in COMMISSIONER OF CENTRAL EXCISE, PONDICHERRY VERSUS ACER INDIA LTD. [2004 (9) TMI 106 - SUPREME COURT] would apply and the value need not be included. If the software is integral to the hardware and the said equipment cannot function without the use of such software, the value of the software has to be included in the assessable value of the hardware and it is immaterial whether it is embedded/etched software or not. The Commissioner (Appeals) has not considered in detail any of these facts with regard to the functionality of the software. At the time of hearing, the Bench had directed the parties to furnish further details of the equipment as well as the software to understand the issue. However, both the parties were not able to furnish facts regarding the finished product. The description of the product in the form of brochures, pamphlets, photographs, etc., would help to bring out the nature of the software used in the telecom equipment. Though the Department has put forward contentions explaining the function of COT, RT, NMS, etc., and argued that without the software the hardware cannot function, there is no reliable evidence placed before us by the Department to support the above arguments. On such score, we have no other option but to remand the matter to the Adjudicating Authority. The matter is remanded to the Adjudicating Authority for reconsideration of the issue. The appeal is allowed by way of remand.
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