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TMI Blog2014 (4) TMI 301X X X X Extracts X X X X X X X X Extracts X X X X ..... tay on the balance amount payable by the assessees - Both these appeals are allowed in part - Consequently, the connected miscellaneous petitions are closed – Decided partly in favour of assessees. - Civil Miscellaneous Appeal Nos.1013 and 1014 of 2014 and M.P.Nos.1 and 1 of 2014 - - - Dated:- 21-3-2014 - Chitra Venkataraman And T. S. Sivagnanam,JJ. For the Appellant : Mr. Lakshmi Kumaran and in both CMAs. Mr. R. Parthasarathy For the Respondents : Mr. Mohana Murali for R1 in both CMAs. Central Government Standing Counsel R2- Tribunal JUDGMENT (The Judgment of the Court was delivered by T. S. Sivagnanam,J.) These appeals by the assessees are directed against the common order passed by the Customs, Excise and Service Tax Appellate Tribunal [The Tribunal] in Miscellaneous Order Nos.40351 and 40354 of 2014 dated 04.02.2014. By the said order, the Tribunal directed the assessees to pre-deposit in the case of Aircel Cellular Ltd., a sum of Rs.10,21,25,614/- and in the case of Aircel Ltd., a sum of Rs.24,67,77,929/- as condition precedent for entertaining the appeals. The assessees were granted eight weeks' time to make such deposit. 2. The assessees are ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of the hard disk drive and flash drive have already been included in the value of the hardware declared by the assessee and the assessee are only seeking exclusion of the value of the software that is pre-loaded as well as imported separately in CDs/ODs on payment of license fees. Further, it was contended that there was no evidence available before the Commissioner that the flash drive/EEPROM resides in the motherboard and that the assessees have demonstrated that the flash drive is removable in nature and the software residing therein is easily erased and/or upgraded and such a flash drive, which is easily removable and upgradable cannot form part of the motherboard and therefore, the assessee sought to distinguish the decision of the Hon'ble Supreme Court in the case of Anjaleem Enterprises Pvt.Ltd., vs. Commissioner of Central Excise, Ahmedabad reported in 2006 (194) ELT 129 (SC). Further it was contended that insofar as MSC and BSC are concerned wherein the software admittedly resides in the hard disc drive, the Commissioner failed to take note of this crucial fact. 5. An alternate submission was made that even assuming that irrespective of the nature of the software ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (cited supra). Further it was contended that compact discs or optical discs containing the software were imported and these physical imports were totally ignored by the Department and the Department sought to include the value of the software in the value of the hardware. Further it was submitted that when an intangible item was loaded in a tangible medium it is to be treated as separate goods with separate identity with separate value and by taking note of Note 6 of Chapter 85, there is no way in which the value of the software can be considered as that of the hardware. With the above contentions and after relying upon several other decisions of the Hon'ble Supreme Court and that of the Tribunal the assessees sought for complete waiver of pre-deposit and stay of the demand. 7. The Revenue resisted the claim of the assessees by contending that the dispute involved is about the valuation of goods rather than classification and there were no separate existence for software for which huge value has been declared and exemption from customs duty claimed. Further it was contended that the software in question was not just pre-loaded into the equipment but it formed part of the fi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... specified in heading 8523? (iii) Whether the Hon'ble Tribunal was correct in proceeding on the assumption based on the Order-in-Original that the software was embedded software by ignoring the reply and appeal memorandum and expert evidences filed by the appellant at various stages? (iv) Whether the Hon'ble Tribunal was correct in not following CCE vs. Acer India Ltd., and in following Anjaleem Enterprises P.Ltd. v. CC when the software in the present case was loaded only on the non-volatile storage device and not on the EPROM or IC? (v) Whether the Hon'ble Tribunal has erred in holding that the extended period of limitation was applicable when the question involved is a question of law involving interpretation of Chapter Note 6 to Chapter 85 as interpreted by the Larger Bench of Hon'ble Supreme Court in assessee's favour? 10. Mr. Lakshmi Kumaran, learned counsel appearing for the assessees made elaborate submission about the nature of the product, which was imported and the use, which has to be put into. Learned Counsel submitted when the assessee's case was taken up for consideration, the Tribunal considering the divergent views rendered by it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s imported and to whether the assessee had disclosed the same, we do not propose to venture into this aspect at this stage. All that is required to be seen is as to whether the assessee has made out a prima facie case for grant of complete waiver. On examination of the facts placed before the Tribunal and before this Court, we do not think that the assessee has made out a case for complete waiver of the pre deposit and stay of the entire due. Nevertheless when there were two divergent views rendered by the Tribunal and the assessees had placed certain materials before the Tribunal to distinguish their case from that of the case of Bharti Airtel and supported by the decision of the Co-ordinate Bench of the Tribunal in the case of Vodafone Essar, we are of the view that the assessee has made out a prima facie for atleast partial waiver of the pre-deposit. 15. Considering the point raised and bearing in mind the interest of Revenue we deem it fit to direct the assessees to pay 50% of the demand of duty made, in each case, pending appeal before the Tribunal and the assessees' are directed to deposit the same within a period of eight weeks from the date of receipt of a copy of th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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