Customs, Excise and Gold Tribunal - Delhi
Hcl Hewlett Packard Ltd. vs Collector Of C. Ex. on 9 November, 1999
Equivalent citations: 2000(116)ELT667(TRI-DEL)
ORDER Jyoti Balasundaram, Member (J)
1. The sole issue for determination in this batch of appeals is whether the value of systems software, application software and peripherals are includible in the value of computer systems manufactured by the appellants herein.
2. We have heard both sides and carefully considered their submissions.
3. The authorities below have inter-alia relied upon the decisions of the Tribunal in the case of Collector of Central Excise, Bangalore v. Sunray Computers P. Ltd. reported in 1988 (33) E.L.T 787 and Tata Unisys Ltd. v. Collector of Central Excise, Bombay reported in 1994 (73) E.L.T. 96, in coming to the conclusion that the value of computer systems would also include the value of systems software, application software and peripherals. However, we find that the Apex Court, in the case of PSI Data Systems Ltd. v. Collector of Central Excise reported in 1997 (89) E.L.T. 3 (S.C.) (on appeal against the Tribunal's order reported in 1994 (73) E.L.T. 96 and two other orders) has set aside the Tribunal's order, holding that the value of software, if sold along with the computer, cannot be included in the assessable value of the computer for the purpose of excise duty. The Hon'ble Supreme Court has dealt with Note 5 to Chapter 84 of the Schedule to the CETA1985. Although Note 5A alone has been reproduced, while the learned DR before us seeks to rely upon Note 5(b) which sets out as under:
"(b) Automatic data processing machines may be in the form of systems consisting of a variable number of separately housed units. A unit is to be regarded as being a part of the complete system if it meets all the following conditions:
(i) it is connectable to the central processing unit either directly or through one or more other units;
(ii) it is specifically designed as part of such a system (it must, in particular, unless it is a power supply unit, be able to accept or deliver data in a form (code or signals) which can be used by the system".
4. We are unable to agree with the learned DR that this would make any difference to our order, since the Apex Court has specifically held that the value of software cannot be included in the assessable value of the computer for the purpose of leavy of excise duty. Further, in the case of ORG Systems v. Collector of Central Excise reported in 1998 (102) E.L.T. 3 (S.C.), the Apex Court has followed its earlier order in the case of PSI Data Systems cited supra and held inter-alia that peripheral devices and other system software were merely additional devices meant to increase the memory or storage capacity of the computers and other facilities and were not required to be included in the assessable value of the computers under Section 4 of the Central Excise Act, 1944.
5. The judgments of the Apex Court cited supra squarely cover the issue in dispute in these cases; hence following the ratio thereof we hold that the value of systems software, application software and peripherals are not includible in the assessable value of the computer systems manufactured and cleared by the appellants herein. We therefore, set aside the impugned orders and allow the appeals, with consequential relief, if any, due to the appellants herein.