Jhdsjkduijhsbsgd

against acer india ltd CCE. 2004 (8) StGB173.
Summary
Excise Collection Ready-to-use software duty-free software installed on your
hardware. Restrictions: No tax is levied on such software unless it becomes
available under customs law. The
software is loaded into the hardware, but can be sold as a standalone product
without losing its properties.
facts. Petitioner Acer India Co., Ltd.
is a company that manufactures computers and accessories that fall under the
various headings of Chapter 84 of the Central Customs Act of 1985. It was
also used to load operating software, if licensed. Prior to
, the total value of the computer was subtracted from the value of the
operating software to calculate the central tax amount paid to it. Revenue
issued show cause notices to it demanding a differential duty on the premise
that duty is payable on the entire value of the computer including the value of
operational softwares.
Revenue thereafter directed payment of differential duty.
In an appeal before the Supreme Court following contentions were raise.
Contentions of the Revenue.
An operational software implanted in a
hardware becomes a part thereof and as such central excise duty is leviable
on the
total value of the computer.
The “Transaction Amount” contained in Section 4 (3) (d)
of Commodity Tax Act
includes the value of all produced goods calculated as Price
. To do this, the amount or amount paid by the buyer for some reason must be
. Refers to selling along with other value-added amounts.
Embedded software
is part of the computer, so sales tax
is paid for the total amount. In addition,
companies had to preload the
computer
before removing the software from the factory. The central tax will be paid in
full at
. Allegations by Acer India Ltd.
The
operating software embedded in a particular order retains the properties of the
software and the ID is just because the information it contains is embedded in
the computer itself and the user has the right to use it. Never lose. .. The
hardware and software are classified separately under the different headings of
the
Customs Law.
That in respect of computers rate of duty is 16% and for softwares it is nil and
thus assessee was entitled to claim deduction of the value thereof from the total
value of the computer.
That as both the hardware and software are assessed separately, in view of
relevant chapter note of the Tariff Act, the valuation of a computer and software
cannot be clubbed together for the purpose of assessment.
A computer which is a
hardware is marketable as such
containing a firm or etched software being
implanted therein,
the valuation thereof also is taken into consideration for
the purpose of excise duty but the operational softwares which are implanted
on
specific orders placed by the customers would retain the characteristics
of software and would not lose its identity only because the informations
contained therein together with the right to use the same is implanted in the
computer itself.
RELEVANT STATUTORY PROVISIONS
Central Excise Act.
Section 2(d) "excisable goods" means goods specified in the
First Schedule and the Second Schedule to the Central
Excise Tariff Act as being subject to a
duty of excise ;
Section 3. Duties specified in the Schedule to the Central
Excise Tariff Act, 1985 to be levied.
(1) There shall be
levied and collected in such manner as may be
prescribed,
(a) a duty of excise, to be called the Central Value Added
Tax (CENVAT) on all excisable goods which are
produced or manufactured in India.
Section 4 . Valuation of excisable goods for purposes of
charging of duty of excise.
(1) Where under this Act, the
duty of excise is chargeable on any excisable goods with
reference to their value, then, on each removal of the
goods, such value shall
(a) in a case where the goods are sold by the assessee, for
delivery at the time and place of the removal, the
assessee and the buyer of goods are not related and the
price is the sole consideration for the sale, be the
transaction value;
(3) for the purposes of this section,
(d) "transaction value" means the price actually paid or
payable for the goods, when sold, and includes in
addition to the amount charged as price, any amount that
the buyer is liable to pay to, or on behalf of, the assessee,
by reason of, or in connection with the sale, whether
payable at the time of the sale or at any other time,
including, but not limited to, any amount charged for, or
to make provision for, advertising or publicity, marketing
and selling organization expenses, storage, outward
handling, servicing, warranty, commission or any other
matter; but does not include the amount of duty of excise,
sales tax and other taxes, if any, actually paid or actually
payable on such goods."
Reasoning of the Court.
Interpreting Taxing/Fiscal
Statute:
In Cape Brandy Syndicate Vs. Inland Revenue Commissioners,
[(1921) 1 KB 64 ], it is stated that :
"In a taxing Act one has to look merely at
what is clearly said.
There is no room for any
intendment.
There is no equity about a tax.
There is no presumption as to tax.
Nothing should be read and nothing should be implied.
Only
can see the language used fairly.
W.M. Cory & Sons Ltd. vs. Inland
Ways and

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against acer india ltd CCE. 2004 (8) StGB173.

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