2007 (10) TMI 466 - AT - Central Excise

Summary

Issues:
Rectification of mistake in the Tribunal's order regarding duty payment on basic software, incorrect application of case laws, exclusion of bought-out items, re-quantification of duty payable, and re-determination of penalty.

Analysis:
The applicant sought rectification of the Tribunal's order, claiming that duty payment on basic software had been ignored, and the duty demand was wrongly raised. They argued that the Commissioner accepted that optional/operational software is not liable to duty, but the Tribunal erred in not distinguishing between basic and operational software. The Tribunal was criticized for not following the Supreme Court's decision in Acer India and for dismissing the appeal erroneously. The applicant contended that the duty on basic software had already been paid, and the demand was incorrectly confirmed.

The Tribunal considered the submissions and found no merit in the claim that certain case laws were incorrectly applied. They reiterated that duty was to be charged on the equipment containing basic software, not on the software itself. The Tribunal directed re-quantification of the duty payable and re-determination of the penalty, emphasizing that the value of bought-out items should be included in the duty payment. The Commissioner was instructed to hear the applicant before deciding the duty payable.

Regarding the appeal arising from multiple show cause notices, the Tribunal noted that the defence was based on charges not being subject to duty, rather than claiming duty payment on the software's value. The Commissioner's decision on the duty demand was upheld, but the Tribunal directed a re-evaluation of the differential duty involved in other show cause notices. The applicant was given the opportunity to provide written submissions and supporting documents for re-determination of duty within a specified timeframe.

In conclusion, the Tribunal disposed of the application with directions for re-quantification of duty, re-determination of penalty, and a re-evaluation of duty demands on software values. The Commissioner was tasked with expeditiously reviewing the differential duty involved in the show cause notices, considering the applicant's submissions for a fair resolution.