2008 (8) TMI 75 - AT - Central Excise

Whether buying various computer parts and installing the same would amount to manufacture of computer system or not - We fine that issue is no more res integra and stands settled by the various Tribunal s decision and Hon ble Supreme Court, holding that impugned activity not amounts to manufacture appeal of revenue is rejected

Summary

Issues:
Whether buying various computer parts and installing them amounts to the manufacture of a computer system.

Analysis:
The main issue in the present appeals filed by the Revenue against the Commissioner's order is whether the act of purchasing different computer parts and assembling them constitutes the manufacture of a computer system. The Commissioner had ruled that supplying CPU, keyboard, and printer after procuring them from the market and installing them does not amount to the manufacture of a computer system. This decision was supported by the judgment of the Hon'ble Supreme Court in the case of CCE, Mumbai v. CMS Computers (P) Ltd. The Commissioner highlighted that monitors or printers are not essential parts of a computer but rather peripheral items. Additionally, there are no provisions in the central excise law to categorize these activities as manufacturing computer systems. The Tribunal found that this issue has already been settled in previous decisions, such as Commissioner v. M/s. Wipro Information Technology Ltd. and CCE, Bangalore v. Wipro Ltd. (Infotech Group). Furthermore, the Supreme Court's rulings in the cases of M/s. PSI Data Systems and CCE, Mumbai v. CMS Computers P. Ltd. emphasized that buying monitors and printers from the market, paying duties on them, and supplying them along with computers do not constitute manufacturing computer systems. Therefore, the Tribunal upheld the Commissioner's order and dismissed the Revenue's appeals.