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TMI Blog2007 (3) TMI 30X X X X Extracts X X X X X X X X Extracts X X X X ..... l No. 09/Commr(Adjudication)/2005, dated 28-4-2005 relates to the demand of duty of Rs. 21,27,128/- relating to the period 1991-92 to 1996-97 on account of basic software contained in telecom equipment namely, consoles as against the demand of duty of Rs. 43,71,016/- on account of software in the show cause notice and imposition of penalty of Rs. 20 lakhs on the appellant company. 3. Appeal No. E/2988 of 2005 arises out of the order in original No. 10-29/Commr(Adjudication)/2005, dated 7-6-05 covering 20 show cause notices issued on various dates from 26-2-97 to 11-3-2004, confirming demand of duty of Rs. 10,64,653/- on account of value of basic software not included in the telecom equipment namely, consoles during the period September 199 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le goods' and satisfy the requirement of Section 3. A machinery provision contained in Section 4 and that too the explanation contained therein by way of definition of 'transaction value' can neither override the charging provision nor by reason thereof a 'goods' which is not excisable would become an excisable one only because one is fitted into the other unless the context otherwise requires". 5. Learned SDR for the department submits that the case relating to ACER India Ltd. is distinguishable from the case of the present appellant. He relies on the judgment of the Hon'ble Supreme Court in the case of Anjaleem Enterprises Pvt. Ltd. v. C.C.E., Ahmedabad -2006 (194) E.L.T. 129 (S.C.) which considered the earlier judgement of the Supreme C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , V6, V9 and V4EB 131 were different versions of system software used in various EPABX manufactured by M/s. TTL. It was also clarified that software for PSX/PMX resided in EPROM (Erasable Programmable Read Only Memory); that, first the EPROM was removed from the system and brought to the factory of M/s TTL where the earlier version was erased by using an erasing equipment and the desired version viz. V6 was copied on the EPROM with the help of master data and the programming machine. Similarly, software for IDX resided in floppy diskette; that for upgrading, the floppy diskette was brought to the factory and the earlier version was over written with the desired version viz. V4 EB 131 with the help of an IDX system. 25.7. From the above, it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... em and it was its intelligence. 8.2 Software supplied separately as such no doubt is subject to nil rate of duty. However, when such software is in the native of basic software which is embedded in the system and which has become integral part of the computer or other equipments, then they become part and parcel of the computer or other equipment. It is not a case of charging duty on the software but it is a case of charging duty on the computer/equipment which includes the value of such basic software. 8.3 Similar views have been expressed by the Hon'ble Supreme Court in this judgment in the case of Anjaleem Enterprises Pvt. Ltd. cited supra. The relevant portions of the judgment are extracted below: "29. In the case of ACER India Ltd. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an integral part of the system. The levy is on the unit. The levy is not on the programmed EPROM. The programme embedded is not an easily removable. Hence, it will not fall in the category of recorded media under tariff item 85.24 and remains an IC under tariff item 85.42". 9. Therefore, on merits, the decision of the Commissioner in holding that the value of the basic software which is reportedly a part of EPROM (Erasable Programmable Read Only Memory) is includible in demanding duty on the equipment is legal and proper. 10. It is noticed that in respect of demand relating to the period covered by Appeal No. E/1996 of 2005 initial demand proposed in the show cause notice was Rs. 43,71,016/- on account of proposed addition of value of so ..... X X X X Extracts X X X X X X X X Extracts X X X X
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