9911796707
TMI Blog2012 (11) TMI 519X X X X Extracts X X X X X X X X Extracts X X X X ..... vely. 3. The relevant facts, in brief, are that the appellants are engaged in the manufacture of Automation Products, Distribution Control Systems etc. and imported materials required for manufacture of such final products. They, in particular, purchased Distributed Control System (DCS) AC460 from M/s. ABB Sweden. It is claimed by the appellant that paper licences such as 'AdvaControl Basic Software Licence for AC460' and 'AdvaControl Basic Software Redundancy Licence for AC460' were also supplied by M/s. ABB Sweden to the appellant. The DCS imported by them is pre-loaded with the software namely 'AdvaControl Basic Software for AC460' and 'AdvaControl Basic Software Redundancy for AC460'. The value of software is included in the value ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nnot be treated as part of hardware. Whether the licences are classified under Chapter 49 or Chapter 8523, they are exempted by Notification No. 21/2002-Cus., dated 1-3-2008 (Serial No. 157). (d) Therefore, inclusion of the value of such licence in the value of hardware is totally not justified. (e) Referring to Rule 10(1)(c) of the Customs Valuation Rules, he submits that inclusion of licence fee is permissible only when it is condition of sale of the imported goods. Any licence required as a condition for use subsequent to import cannot be treated as condition of sale. (f) He also refers to the explanatory notes on Rule 10(1)(c) which reads as under : "1. The royalties and licence f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sically refers to using of different options available in the hardware and therefore, the same should be rightly treated as part of the hardware. Further, referring to the grounds of appeal by the appellants (particularly paragraph C7.10 D.2), she submits that the softwares relating to which the licences were allegedly imported separately have been pre-loaded to the machinery and paper licences for the software were of no use except to activate the different facilities available in the hardware. 5.2 Learned Assistant Commissioner, Mrs. Manasa Gangotri Kata, elaborated on the technical aspects of DCS and also the terms "non redundant communication" and "redundant communication". She submitted that the data/reports are captured simultan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the same invoice the values of so called software licence certificates also stand included. There is, prima facie, substance in the finding of the authorities below that the software licence certificates are part and parcel of the hardware imported by the appellants. The appellants are not able to show that the software certificates related to any consignment of software separately imported. In other words, the software licence certificates, prima facie, related to software pre-loaded into the hardware and the cost of pre-loaded software undisputedly stands included in the assessable value of hardware. 6.2 The submission of the appellant that the software licence certificate should fall under CH 4907 as "Documents of title conveying ..... X X X X Extracts X X X X X X X X Extracts X X X X
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