TMI Blog2013 (11) TMI 1479X X X X Extracts X X X X X X X X Extracts X X X X ..... under dispute is the value of software etched on hardware when goods were imported - Website of the manufacturer indicates value as single unit price of hardware and value of the software were not available separately. It is also noted that the basic and the main function of the imported goods related to the hardware components and the embedded software used to operate the hardware, an integral part of the same. The goods imported by the appellant has no independent existence at the moment it is etched on the volatile memory of the hardware, it becomes part and parcel of the said system. Thus, the claim of the learned counsel in this case that the software and hardware were separate and distinct cannot be acceptable - Following decision in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... recorded media would be classifiable under Heading 8524 and exempted from whole of duty. The learned counsel drew the attention of the Bench on operational aspects of Watchguard products and the literature. He submits that Watchguard Software is distinct from hardware and, therefore, it cannot be parts of computer. He relied upon the decision of the Hon ble Supreme Court in the case of Commissioner of Central Excise, Pondicherry v. Acer India Ltd. reported in 2004 (172) E.L.T. 289 (S.C.) and in the case of Commissioner of Customs, Chennai v. Hewlett Packard India Sales Pvt. Ltd. reported in 2007 (215) E.L.T. 484 (S.C.). 4. The learned authorized representative for the Revenue reiterated the findings of the Commissioner (Appeals). He submi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are Software in recorded media and would be classifiable under 8524.40 which covers magnetic tapes for reproducing phenomena other than sound or image. 7. The main contention of the learned counsel is that the operating system and the application software controlling the operation of the device has been embedded into a non-volatile memory of the device by the manufacturer. He further submits that the hardware and software are distinct items both of which are required for the appliance to perform its design functioning. It is also stated that the hardware and software are different and distinct product and, therefore, the same were shown separately in the commercial invoice and the goods should be classified separately and assessed to d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the appellant relied upon the case of M/s. Hewlett Packard India Sales Pvt. Ltd. (supra), wherein the issue was in respect of classification of Hard Disc Drive loaded with software imported along with laptops and also on the issue of transaction value of the lap top loaded with operating system. In para 10 of the order the Court held as under : 10. Applying the above tests to the facts of the present case, we are of the view that pre-loaded operating system recorded in HDD in the laptop (which is the item of import) forms an integral part of the laptop. What was imported in the present case was a laptop as a stand alone item (unit). Present dispute relates to the transaction value of the unit. An importer who buys a laptop containing an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ke care of upgrades of software. In this appeal the value under dispute is the value of software etched on hardware when goods were imported. 12. In the case of ACER India Ltd. (supra), it was dealing with operating software (packaged software) and such software were available in the market separately. The manufacturer of computer was only loading the software under licenses purchased by the buyer of computers before clearance of computers from the factory. The Court was of the view that computer and software were distinct commodities in that case and the cost of software could not be subjected to excise duty. This situation is not comparable to the situation in the present case where the software was that of the manufacturer himself and ..... X X X X Extracts X X X X X X X X Extracts X X X X
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