Customs, Excise and Gold Tribunal - Bangalore
Digital Equipment (India) Limited vs Collector Of Central Excise on 27 January, 1997
Equivalent citations: 1997(70)ECR326(TRI.-BANGALORE)
ORDER
U.L. Bhat, J. (President)
1. The short question arising for consideration in this appeal is whether the software sold to customers is to be treated as part of the computer and the value thereof is to be added to the value of computer for the purpose of reckoning duty. The assessee contended before the adjudicating authority and the Collector (Appeals) that value of software cannot be added to the value of computer, pointing out that the assessee purchases software from the United States of America and sells computers with or without softwares, as may be desired by the customers. A line of decisions of the Tribunal under the old Tariff took the view that software has to be treated as part of the computer and duty charged on the total value at the rate applicable to computers (see Collector of Central Excise, Bangalore v. Sunray Computers (P) Ltd. , Collector of Central Excise, Bangalore v. Wipro Information Technology Ltd. , Collector of Central Excise v. PSI Data Systems , ORG Systems v. CCE, Vadodara , Uptron India Ltd. v. Collector of Central Excise, Allahabad and International Computers Indian Manufacturers Ltd. v. CCE, Pune ). The Tribunal took a similar view in regard to the question under the new Tariff also as seen from Tata Unisys Ltd. v. Collector of Central Excise, Bombay .
2. The present controversy arises under the new Tariff. When the appeal came up for consideration before n two-Member Bench, it was contended on behalf of the appellant that the decision in Tata Unisys Ltd. required reconsideration and the reliance placed in the decision on certain observations made in the decision by the Tribunal under the Old Tariff was not justified and, in any event, Chapter Note 6 under Chapter 85 places the matter beyond any controversy in favour of the assessee. Having heard both sides, the two-Member Bench felt that the impact of Chapter Note 6 under Chapter 85 requires careful scrutiny at the hands of a larger Bench and, therefore, the question "Whether the question decided in Tata Unisys Ltd. v. Collector of Central Excise is correctly decided", was referred to a Larger Bench. We propose to decide the appeal since the matter has now been concluded by the decision of the Supreme Court overruling the earlier view taken by the Tribunal.
3. Against the earlier decisions of the Tribunal, three of the assessees, namely, Wipro Information Technology Ltd., PSI Data Systems Ltd. and Tata Unisys Lid. filed appeals before the Supreme Court, being Civil Appeal Nos. 79/89, 491 /89 and 6042/94 respectively. These appeals were heard together and disposed of by the Supreme Court by a common judgment dated 17.12.1996 .. The Supreme Court took the view that both under the old Tariff and the new Tariff to the effect that computer and software are distinct and separate and software cannot be regarded as part of the computer and, therefore, the value of software even if sold along with the Computer, cannot form part of the assessable value of the computer for the purpose of excise duty. The Supreme Court set aside the earlier orders passed by the Tribunal.
4. Applying the view taken by the Supreme Court to the facts of the case, we hold that value of software sold by the appellant to customers, either along with the computer or separately, cannot be included in the assessable value of computer. Therefore, the impugned orders as well as the demand confirmed therein are set aside. Appeal is allowed, Pronounced and dictated in the open Court.