TMI Blog2017 (5) TMI 445X X X X Extracts X X X X X X X X Extracts X X X X ..... ellants have not been able to prove otherwise, either in the original adjudication or even before this forum. Reliance was placed in the case of Bhagyanagar Metals Ltd. [2016 (2) TMI 614 - CESTAT HYDERABAD], wherein Tribunal relied upon Apex Courts judgment in CC Chennai Vs Hewlett Packard India Sales (P) Ltd. [2007 (8) TMI 347 - SUPREME COURT OF INDIA] which held that preloaded operating systems software in the hard drive of a laptop forms an integral part of the laptop and therefore cost of such preloaded software forms part of the value of laptop. Accordingly, only laptop is imported with inbuilt preloaded operating system recorded on the hard disk. Such items forming integral part of the laptop and has to be classified as laptop and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... k station consisted of computer with keyboard, mouse, monitor and hub as per invoice and that Item No.2 was not found to be imported separately. However, 2000 empty smart cards without any software were also found. Importer took the stand that smart cards were dump cards and that software was preloaded into computer system on account of security reasons. Department took the view that software was very much embedded in the hardware. Accordingly, show cause notice was issued to the importer proposing classification of the imported items under CTH 8525.10 and CETH 8525.00. It appears that subsequently two corrigenda were issued, one on 18.07.2003 and another dt. 03.11.2003. The first one for change in adjudicating authority and the subsequent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fferent classification viz. 8471 has been ordered by the Commissioner. Hence the impugned order is outside the scope of the SCN/corrigenda. 5.1 On merits, ld. advocate submits that the software is only preloaded on to a hard disk and cannot be considered as embedded software and hence the ratio of the Hon'ble Supreme Court judgement in the case of CCE Pondicherry Vs Acer India Ltd. - 2004 (172) ELT 289 (SC) is relied upon. Therefore Tribunal's Larger Bench decision in the case of Bhagyanagar Metals Ltd. Vs CCE Hyderabad-I will not apply to this case. 6. On the other hand, Shri B. Balamurugan (AC), Ld. A.R submits that the SCN as also corrigenda have not been filed by the appellant along with their appeal which puts the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the time of import, appellants have claimed CTH 8471 only for the hardware and for the software portion they claimed CTH 852499. From the facts on record, it is evident that software was very much part of the hardware imported. Adjudicating authority has noted that the software has merged and formed part of the essential constituent of software for which reason, the identity of the software is lost and the hardware and software values will be inseparable. Thus, it appears to reason that the software has been embedded along with hardware. Appellants have not been able to prove otherwise, either in the original adjudication or even before this forum. On the other hand, we find that even on this aspect, they have taken contradictory stands a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hard disk in the guise of software. However the present case is definitely one where predominant cost of the hard disk and the hardware have been attempted to be passed on in the garb of software. 11. More relevant to the facts of this case would be the ratio of Tribunal's Larger Bench decision in Bhagyanagar Metals Ltd. (supra) wherein Tribunal relied upon Apex Court's judgment in CC Chennai Vs Hewlett Packard India Sales (P) Ltd. - 2007 (215) ELT 484 (SC) which held that preloaded operating systems software in the hard drive of a laptop forms an integral part of the laptop and therefore cost of such preloaded software forms part of the value of laptop. Accordingly, only laptop is imported with inbuilt preloaded operat ..... X X X X Extracts X X X X X X X X Extracts X X X X
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