TaxTMI 
TaxTMI 
1997 (4) TMI 260
X X X X Extracts X X X X
X X X X Extracts X X X X
....ilicon Graphics Inc. USA (for short, SGI). Appellant filed Bill of Entry dated 24-6-1995 for clearance of "VARSITY DEVELOPER Pak-I set and MEDIA VARSITY DEVELOPER Pak-25" both falling under Chapter Heading 8473.30, declaring the value as Rs. 1,99,612.80 on the basis of invoice dated 17-5-1995 issued by SGI. After the Bill of Entry was assessed, the goods examined on 25-8-1995 in the presence of CHA were found to be "Media Varsity Developer Pak-27 (for short, MVDP) sets each set containing 20 softwares " and "Varsity Developer Pak (for short, VDP)-1 set containing 25 sets of License". Shri P.V. Medury, Financial Controller of the appellant, when questioned stated that the Media Varsity Developer package contains various application softwares, that the value of such software when imported individually would work out to US $ 10,032.50, that Varsity package is available only to approved educational institutions world-wide as per SGI programme on the basis of agreement that the local sale price of Varsity pack is US $ 1000 less discount, that the Varsity package did not differ from the software package supplied to commercial buyers and the Varsity package is discounted substantially to ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ion. Price charged to educational/research institutions cannot be compared with price charged to commercial buyers, as the two form different classes of buyers. Price charged by SGI for import of one licence with one set of 20 CDs was US $ 300.00. The price charged by appellant for Varsity pack was US $ 300 for one RUL and one set of 20 CDs. US $ 700 was charged as cost of one year's support programme. The price of US $ 300 included US $ 100 for one set of CD, US $ 132 for RUL and overhead and other expenses etc. Appellant produced invoices relating to import of Varsity pack by Tata Elixis India Ltd., DCM Data Systems Ltd., National Aeronautical Laboratory, Bangalore and National Chemical Laboratory, Pune at US $ 700 availing benefit of exemption of duty. 4. The adjudicating authority overruled the above contentions and confirmed the proposals in the show cause notice. Hence, this appeal. 5.  The Bill of Entry and invoice described the consignment as consisting of " VDP-1 set and MVD-25". According to the department, this meant that the consignment consisted of only 25 sets of MVD, but examination showed that besides the 25 sets of MVDP, there were two sets of CD....
X X X X Extracts X X X X
X X X X Extracts X X X X
....have fixed US $ 100 as the price of Varsity MDP set, appellant fixed the price of US $ 1000 per set and hence the lower price is unacceptable. (f) The consignment is not a pack but has individual software having independent 13 RULs. There is no correlation between 20 CDs in one package and 13 licences. (g) Appellant claims to have supplied Varsity packs to certain institutions. Facts relating to Delhi Institute of Technology (DIT) were ascertained. Appellant's invoice dated 22-6-1995 to DIT indicated the price of 3 sets of pack as US $ 99550 which meant the price of each pack is US $ 33183. The invoice refers to 12 CDs in a set. The declared value of US $ 100 per set is insignificant and deserves to be rejected. (h) The vendor of DIT is stated to be M/s. DCM Data Systems under invoice dated 10-7-1995 and discounted prices shown as Rs. 23,89,455.00 for 3 units each of SGI workstation, Ports and Software (Varsity programme). Price of software is not separately shown. This price also improbabilises the declared value. (i) The consignment sold under invoice dated 10-7-1995 was actually imported by DIT itself and cleared under Bill of Entry 249257 of June 1995 and invoice da....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ucational and research institutions and the import was for supply to such institutions as per Varsity Pak Scheme. This is made clear in the literature of the appellant a copy of which was made available to the adjudicating authority. It was not a sales promotion strategy. The status of the institutions is carefully examined and the benefit of the scheme is subject to the institution being run on non-profit basis. That no institution makes direct import is due to the circumstance that appellant was the distributor in India of SGI. The apparent discrepancy between the prices of US $ 1000 and US $ 100 had been properly explained but was not considered by the adjudicating authority. The conclusion that there were 13 independent RUL and this had no correlation with 20 CDs was the result of lack of proper appreciation of facts SP-4-EDU-DEV-5.3 Package (page 79 of paper book) refers to 20 items of software as comprised in the package. Items 1 to 6 relate to 5.3 operating system specific, items 7 to 12 relate to 6.0.1 operating system specific which are upgraded versions of items 1-6 and items 13 to 20 relate to "Common" which can be used in any system. Every computer has item (1) built in....