Excise valuation excludes software and peripherals from computer system assessable value under settled Supreme Court principles.

Systems software, application software and peripherals were held not includible in the assessable value of computer systems for excise duty. The Tribunal applied Supreme Court rulings that software sold with computers is outside the valuation of the computer, and treated peripheral devices and system software as additional facilities rather than components required to be added under section 4 of the Central Excise Act, 1944. Note 5(b) to Chapter 84 of the Central Excise Tariff Act, 1985 did not change that position, and the appeals were allowed with the impugned orders set aside.

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Issues: Whether the value of systems software, application software and peripherals is includible in the assessable value of computer systems manufactured and cleared for excise duty purposes.

Analysis: The Tribunal followed the Supreme Court rulings which held that software sold along with computers is not includible in the assessable value of the computer for excise duty. It was also held that peripheral devices and system software are additional devices or facilities and are not required to be included in the assessable value of the computers under section 4 of the Central Excise Act, 1944. The reference to Note 5(b) to Chapter 84 of the Schedule to the Central Excise Tariff Act, 1985 did not alter that position.

Conclusion: The value of systems software, application software and peripherals is not includible in the assessable value of the computer systems; the appeals were allowed and the impugned orders were set aside.

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