Separated customized software is not dutiable as part of access control equipment when supplied independently for data retrieval.

Customized software separately supplied on CD and loaded into the customer's computer for retrieving and monitoring data from an access control device was treated as distinct from the device itself. The embedded operating software already forming part of the duty-paid apparatus was different from the separately developed customer-specific software, which was not physical firmware embedded in the equipment. Note 6 of Chapter 85 on media presented with apparatus did not apply because the software was not supplied along with the device. The distinction between embedded firmware and separately supplied software was material, so the software was not includible in the assessable value or dutiable as part of the access control equipment.

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Issues: Whether customized software separately supplied on CD and loaded in the customer's computer for retrieval and monitoring of data from an access control device was includible in the assessable value or classification of the device as its part.

Analysis: The access control system manufactured by the appellant already contained embedded operating software and was duty-paid as part of the device. The software in dispute was separately developed for the customer's requirement, used in the customer's computer, and enabled retrieval of attendance and access data from the device. It was not physical access-control firmware embedded in the equipment. Note 6 of Chapter 85 of the Central Excise Tariff Act, 1985, on media presented with apparatus, did not apply because the software was not supplied along with the device. The distinction between embedded firmware and separately supplied customized software was material, and the cited authorities on embedded ROM or operational software did not govern the present facts.

Conclusion: The separately supplied customized software was not part and parcel of the access control device and could not be subjected to Central Excise duty as part of the apparatus. The finding was in favour of the assessee.

Final Conclusion: The impugned order was set aside and the appeal was allowed, as the separately supplied software was held not to form part of the excisable access control equipment.

Ratio Decidendi: Customized software supplied separately for use in the customer's computer, and not embedded in the apparatus itself, is not classifiable or dutiable as part of the excisable equipment merely because it retrieves data from that equipment.

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