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2013 (8) TMI 399 - AT - CustomsEscapement of duty whether there was the case as to the escapement of duty on the part of assessee department was of the view that they had artificially splited into the values to software and hardware and claimed nil rate of duty on the value of CD ROM/software while paying duty for the hardware HWT imported separately through port - Held that - Order passed by the Commissioner on appreciation of erroneous facts - order was not sustainable in the eyes of law Court followed the judgement of PSI DATA SYSTEMS LTD. Versus COLLECTOR OF CENTRAL EXCISE (1996 (12) TMI 47 - SUPREME COURT OF INDIA) - order was beyond the scope of the show-cause notice - Hardware and software to be assessed independently on merits whether they imported together or separately - Commissioner had gone beyond the scope of show-cause notice by holding that the appellants have inflated the value of software decided in favour of assessee.
Issues:
1. Artificial splitting of hardware and software values during import. 2. Allegation of over-valuation of software leading to differential duty demand. 3. Correct assessment of software value in relation to hardware during import. Analysis: Issue 1: The case involved the appellant importing Fixed Wireless Terminal (FWT) modules and WLL loader software separately, declaring assessable values for each. The Department alleged artificial splitting of values to evade duty, leading to differential duty demands across multiple imports. Issue 2: The Commissioner held that the appellant over-valued the software, imposing duty demands and penalties based on a perceived discrepancy in the declared software value. The Commissioner concluded that the actual software value was significantly lower than declared, leading to a duty demand of &8377;14,34,00,490/- along with penalties. Issue 3: The Tribunal analyzed the show-cause notice and found that the Commissioner's conclusions were based on erroneous facts. The Tribunal noted that the software value in question pertained to different networking software, not the FWT/HWT modules imported. Additionally, evidence indicated different agreed prices for hardware and software, contradicting the Commissioner's assessment. The Tribunal concluded that the impugned order was unsustainable due to incorrect factual appreciation and overstepping the scope of the show-cause notice. The Tribunal set aside the order, allowing the appeals with consequential relief.
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