Software value excluded from computer assessable value for excise duty, as software is distinct from the computer

Software sold along with or separately from computers is treated as distinct from the computer for excise valuation under Chapter 85. In light of the Supreme Court's view that computer software cannot be regarded as part of the computer, its value is not includible in the assessable value of computers for excise duty. The note rejects earlier approaches that had treated software as part of the computer and applies the binding distinction between the two for valuation purposes.

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Issues: Whether the value of software sold along with or separately from computers is includible in the assessable value of computers for excise duty.

Analysis: The dispute arose under the new tariff in the context of Chapter Note 6 of Chapter 85. The Tribunal noted that earlier decisions had treated software as part of the computer, but the Supreme Court had subsequently held that computer and software are distinct and separate, and that software cannot be regarded as part of the computer for excise valuation purposes. In light of that binding view, software value sold with or without the computer could not form part of the computer's assessable value.

Conclusion: The value of software is not includible in the assessable value of computers for excise duty, and the assessee succeeds.

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