TMI Blog1998 (7) TMI 93X X X X Extracts X X X X X X X X Extracts X X X X ..... ed that the computers manufactured and supplied by Orbit, DSI or the appellant (from May, 1982 onwards) were complete computers, which had a Central Processing Unit, with etched-in or burnt-in software, a Key Board (input device) the monitor (output device) and Disc drives. The computers, as above, were cleared after complying with all requirements under the Excise Law and proper duty as computed was paid. The peripheral devices and other systems software were merely additional devices meant to increase the memory or storage capacity of the computers and other facilities. It is also not disputed by the Revenue that the peripheral devices were imported by the appellant and the appellant had paid countervailing duty on such imported periph ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... clear that the Revenue seriously claimed all through that DSI and Orbit were the dummy units of the appellant. The Tribunal, as final fact finding authority, has held that they were not dummy units. However, the contention of the appellant that Adprint is an independent concern, was not accepted by the Tribunal and the Tribunal has given a clear finding that Adprint is a dummy unit of the appellant. We proceed on the basis of these findings given by the Tribunal as they are binding on the parties. 3. The principal issues in controversy are : (a) whether the computers manufactured and cleared by the DSI and Orbit are liable to be treated as the computers manufactured and cleared by the appellant and, therefore, liable for excise dut ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uty part and penalty was reduced from Rs. 25 lacs to Rs. 10 lacs. 5. The Tribunal, after analysing the facts, held that the supply of raw materials alone does not make the appellant as manufacturer of the computers factually manufactured by DSI and Orbit. However, the Tribunal was of the view that the supply of specifications and designs was actually at par with the supply of specific designs of a tailor-made item and hence will constitute manufacture. On that basis, the Tribunal held that the case of supply of specifications and designs for Computers will amount to manufacture and price charged therefor shall be includible in the assessable value. Similarly, the Tribunal held that the value of peripherals at the time of supply of c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... udgments was erroneous. Our attention was drawn to the judgment of this Court in State of Uttar Pradesh v. M/s. Kores (India) Limited - (1977) 1 SCR 837, where it was held that a typewriter ribbon was an accessory to a typewriter and not a part of the typewriter though it might not be possible to type out any matter on the typewriter without the ribbon. This Court quoted with approval the following observation of the High Court of Mysore in State of Mysore v. Kores (India) Ltd. : "Whether a typewriter ribbon is a part of a typewriter is to be considered in the light of what is meant by a typewriter in the commercial sense. Typewriters are being sold in the market without the typewriter ribbons and therefore typewriter ribbon is not an ess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it were also included in the assessable value of the computer, and the argument that was advanced in respect of the value of the software was also advanced in respect of these charges. Learned Counsel for the respondent, fairly, did not dispute that the value of the software that the appellants might sell with their computers, if so ordered by the purchasers thereof, could not be included in the assessable value of the computers. He was, however, at pains to urge that this did not apply to the firm software that was etched into the computer; this is not even the appellants' case. In the first place, the Tribunal confused a computer system with a computer; what was being charged to excise duty was the computer. Secondly, that a compute ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oftware, a Key Board (input device) the monitor (output device) and Disc drives. The computers, as above, were cleared after complying with all requirements under the Excise Law and proper duty as computed was paid. The peripheral devices and other systems software were merely additional devices meant to increase the memory or storage capacity of the computers and other facilities. It is also not disputed by the Revenue that the peripheral devices were imported by the appellant and the appellant had paid countervailing duty on such imported peripherals. In the light of these facts, we have no difficulty to apply the ratio in the judgment of this Court in PSI Data Systems (supra) and grant relief to the appellant. The Tribunal itself has pla ..... X X X X Extracts X X X X X X X X Extracts X X X X
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