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TMI Blog2009 (6) TMI 590X X X X Extracts X X X X X X X X Extracts X X X X ..... 'Automated Teller Machines' (ATM) falling under CSH 8472 90 90 of the First Schedule to the Central Excise Tariff Act, 1985 (Tariff). They import 'Aptra XFS' software and 'Aptra NDC' software (Aptra software) in CDs and licence cards, falling under Chapter Heading 8523 8020 of the tariff for the manufacture of ATMs. The imported software along with 'Windows' software are pre-loaded on to the Hard Disk Drives (HDD) of the machines manufactured and cleared by NCR. NCR paid duty at the rate of 16% ad valorem on the ATMs on a value including the value of the Windows. For the purpose of assessment of ATMs they did not include the value of Aptra software on the plea that they were customized software and exempt from payment of duty. Adjudicating allegations of short payment of duty and concomitant violations of statutory provisions, the Commissioner of Excise demanded differential duty of an amount of Rs. 4,82,61,536/- along with applicable interest. She also imposed penalty of Rs. 1,50,00,000/- on NCR under Rule 25 of the Central Excise Rules, 2002 (CER). The instant application seeks waiver of pre-deposit of these dues adjudged in the above Order No. 15/08(C) 30-9-08 of the Commissione ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ith the computer or not, they remained classified under the same heading and concluded that "computer and software are different and distinct goods under the Act having been classified differently, and in that view of the matter no central excise duty would be leviable upon determination of the value thereof by taking the total value of the computer and software." Thus, hardware and software, even when they were presented together in a computer, were held as different commodities for the purpose of classification on the basis of the above note. Once this Note was omitted, the ratio of the above judgments could not be applied in deciding the case on hand. On pre-loading of the software identity and became part of the ATM. he assessable value of the ATM could not exclude the of value of the pre-loaded software. Hence the subject demand of duty. 3. In the appeal before us the appellants have taken the ground that Aptra XFS and Aptra NDC software were custom-built for use by the Appellant-company and were exempted as customized software in terms of Notification No. 6/06 dated 1-3-06. They relied on the judgment of the Apex Court in PSI Data Systems Ltd. (supra) and Acer India L ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as a final product manufactured and cleared by NCR but the ATM. 4.2 We find the appellants have not raised any valid challenge to the finding of the Commissioner that the subject software formed integral part of the ATMs. The appellants relied on various case law to argue that software was classifiable a separate commodity and was exempt from payment of duty. We find that as per the Chapter Note 6 of Chapter 85, software had to be classified under the heading meant for software when they were presented with the apparatus for which they were intended. The Note indicated the relevant heading to be 8523 or 8524. By virtue of this Note software had to be classified as software even if it formed part of an article as long as the above Chapter note was on the statute book i.e., up to 1-1-07. Various case law relied upon by the appellants, we find, have been so decided owing to this Note. The ld. reiterated the findings of the Commissioner and sought support from the following case law. We have perused them. 4.5 We find that in the Hewlett Packard case (supra), the Apex Court dealt with valuation of imported laptops containing pre-loaded HDD. The Hon'ble Court found that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... M computer but held that secondary software to be classifiable as separate commodity eligible for exemption. These were accessory and not part of the hardware. In the Anjaleem Enterprises Pvt. Ltd. case (supra) inclusion of value of EPROM in the value of STD-PCO was upheld by the Apex Court approving the decision of the authorities treating EPROM as part of the equipment. These case law do not support the case of the appellants. 5. The appellants have submitted that value of the impugned software could have been validity included in the value of ATMs, had the appellants themselves manufactured them in their factory and loaded it on ATMs. In the instant case, customized software was imported and loaded on the ATMs. We are unable to appreciate the distinction sought to be made out by the appellants. The appellants' argument is on the basis that loading of imported Aptra software does not involve manufacture in the absence of a Chapter Note deeming such process as manufacture. Imported software per se could not be classified under the Central Excise Act in the absence of a deeming fiction. We reject this argument as misconceived. Prima facie, the finding of the Commissioner th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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