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TMI Blog2018 (5) TMI 682X X X X Extracts X X X X X X X X Extracts X X X X ..... ersity STM-1, Altium SDH radio software CD ROMs. They filed bills of entry for discharge of duty liability in respect of bills of entry for the equipment and CD ROMs of software and claimed the benefit of Notification No. 21/2002 classifying software as falling under Chapter 85.24 and exempted from payment of duty. Assistant Commissioner of Customs and Air-cargo complex, Begumpet Hyderabad after seeking information about nature and usage of software imported along with equipment and recording statements of various employees of the importer appellant issued a show-cause notice dated 25.02.2008 on the ground that the value of software not included in the value of the goods imported is incorrect and needs to be included and separate invoices raised is only to avail ineligible benefit of duty exemption provided for software. Appellant contested the said show-cause notice on merits as also on limitation. The adjudicating authority after following the due process of law confirmed the allegations of mis-declaration and by the impugned order included the value of software for determining the duty value of the equipment imported and coming to such a conclusion confirmed the demand of duty, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d that learned counsel was correct in stating before the Bench that the value of the software imported along with equipment need not be included. He relied upon various decisions cited herein above. 7. In the case of Vodafone Essar Gujarat Ltd (supra) the issue which came to be decided in favour of the assessee was whether value of the software needs to be included in the assessable value of hardware imported. The appellant therein imported various equipment related to mobile/cellular telephone services like mobile switching centre, base station controller and base transreceiver from M/s Nokia Corporation which were pre-loaded with software required for operating and also imported media component software under chapter heading 8524 along with benefit of exemption under Notification No 21/2002(Sl No.157). After considering elaborate submissions made by both sides, the Bench held that software meant for telecommunication equipment is classifiable under Chapter Heading No 85.24 and the value of such software cannot be included in the value of hardware. The findings are in paragraph 20 which we reproduce. "20. We have considered the submissions. We find that it is an admitted fact t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was never used is of no consequence as it was meant for use in emergency only which emergency never arose. Even the revenue, in its submissions, has stated that such a plea was of doubtful validity, meaning there by that it cannot be ruled out. Another plea taken by the revenue is that the software in the present case was a firmware, distinct from the other software like Windows XP operating software etc. The firmware is one which is already in read only memory and is programmed in to a circuit permanently. It is normally embedded or etched and resides in the chip itself. The same is generally etched while the chip is being manufactured. Statements of various persons connected with installation and commissioning has categorically brought out that the software in question was not an embedded software or a etched software and is contained only in the Winchester hard disc and therefore this plea is to be out rightly rejected and has even not been acted upon by the Commissioner in her order. A software retains its character as a software, whether it is meant for automatic data processing machines falling under Chapter Heading 8471 or for telephone equipments falling under Chapter Head ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o such distinction as software which was preloaded in the hardware in the general purpose computer was also equated as 'presented with' and classified as a software under Chapter Heading 8524 and this is the manner in which software under dispute has also been loaded. In both cases, it gets integrated. It is another matter that in case of telecommunications, the loading of the software may not be that simple as in general purpose computers but that would not render it as a software of a character which is incorporated in a machine. A software can be said to be incorporated only when it is etched or embedded in the microprocessor/memory chips and whose value has also been held to be includable even by the Apex Court in the case of Acer India Ltd. Since the software in the present case has come in a recorded media in the form of tapes/CDs, separately also, it is clear that it is not of the type which is embedded or etched. In view of this no distinction can be made between the software in dispute and other softwares. The value of such software cannot be added in the value of the hardware as has been conclusively held by the Apex Court in the case of Hewlett Packard (supra) where the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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