2005(07)LCX0340

IN THE CESTAT, WEST ZONAL BENCH, MUMBAI [COURT NO. I]

Ms. Jyoti Balasundaram, Vice-President and Shri Moheb Ali M., Member (T)

Shilp Gravures Ltd

Versus

Commissioner of Customs, Mumbai

Order No. A/820/2005-WZB/C-I, dated 11-7-2005 in Appeal No. C/947/99-Mum.

Cases Quoted -

Sprint R.P.G. India Ltd. v. Commissioner — 2000(01)LCX0171 Eq 2000 (116) ELT 0006 (S.C.) — Relied on............... [Para 2]

Advocated By -

Shri V.S. Nankani, Advocate, for the Appellant.
Shri K.K. Srivastava, DR, for the Respondent.

[Order per : Jyoti Balasundaram, Vice-President].

The above appeal arises out of the order of the Commissioner of Customs, Mumbai, enhancing the assessable value of Software imported separately by the appellants herein on recorded media, holding that the software loaded on the automatic data processing machines should be assessed along with the ADP machines under sub-heading 8471.49 of CTA, and also confiscating the goods under Section 111(m) with option to redeem them on payment of fine of Rs. 6 lakhs and imposing a penalty of Rs. 2 lakhs on the importer.

2.We have heard both sides. We find that the benefit of exemption in terms of Notification No. 23/98-Cus. at Serial No. 206 of the table thereto has been denied on the ground that the software is not classifiable under Customs Tariff Heading No. 85.24 as claimed by the importers for the reason that it is recorded on hard disk drive and therefore cannot be separately classified from the main automatic data processing machines itself under Tariff Heading 84.71, it is for this reason that he has added the value of software loaded on hard disk of the computer to the value of hardware for the purpose of assessment under Customs Tariff Heading 8471.49. However ld. Counsel has drawn our attention to the Apex Court decision in Sprint R.P.G. India Ltd. v. Commissioner of Customs-I, Delhi [2000(01)LCX0171 Eq 2000 (116) ELT 0006 (S.C.)], in which it has been held that Computer Software loaded on a hard disk drive is assessable as of computer software at the rate of 10% as per Heading 85.24 of Customs Tariff Act, 1975 read with Notification No. 59/95-Cus. and not under Heading 84.71. In the light of the above decision, the Computer software loaded on hard disk drive imported by the appellants herein would fall for classification under Tariff Heading 85.24 and eligible to the benefit of exemption from duty in terms of Serial No. 206 to Notification No. 23/98. Since the computer software loaded hard disk drive is held to be classifiable under Heading 85.24 it is to be assessed separately and the value of the computer software cannot be added to the value of hardware for the purpose of assessment under Heading 84.71. We therefore set aside the impugned order and allow the appeal.

(Operative part pronounced in Court)

Equivalent 2005 (192) ELT 0690 (Tri. - Mumbai)