TaxTMI 
TaxTMI 
TaxTMI 
2017 (3) TMI 914
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.... alia mainly submits as under:- i. The goods imported are a. Time Bound Software- Software launched in the market, but imported and distributed for demo/ trial purpose for a limited period of time, say 90-180 days. Such software is also available for free download. b. Beta Software- software released to developers, coders, etc. for testing and fixing bugs/ making improvements before the launch of the fully finished software. ii. Valuation as per the appellant: a. Time Bound Software- cost of media (including replication cost) on which software is loaded. b. Beta Software- Cost of media (including replication cost) on which software is loaded. iii. Valuation as per Order-in-Appeal: a. Time Bound Software- Identical goods Method, under Rule 4, CVR, i.e. value of software with license for perpetual use. b. Beta Software- Identical goods method, under Rule 4, CVR, i.e. value of final version of the software. Till such time the final version is released, assessments to be kept provisional. iv. Demand of Customs duty: The present demand arised out of SVB (Special Valuation Branch) proceedings deciding the valuation in principle. There is no duty demand on any specific....
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....r: * Value of same software, for perpetual use, to be taken; and * Assuming that the life span of software, without a time restriction is five (5) years, the cost can be proportionately adjusted for the period the time bound software is available for use. ii. Beta Software: a. The beta software is made available for testing, usually through free download from the Microsoft web site or through physical CD/ media, where required. Thus, the same is a fully operative software and is not capable of being bought or sold in the market at this stage. b. It is also submitted that from the beta version to the final version, the software may undergo several key changes. In fact, there may also be a situation where the final version is never launched, taking into consideration the feedback received from the developer community, and others who have used the beta version for testing. c. Cost of media (including replication cost) should be accepted as the assessable value: in the present case, admittedly, the beta software is never meant for sale in the open market. Thus, the same is to be considered as non- commercial shipments. In such a case, the cost of the media (including replic....
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.... been launched in the market which is imported for demo/trial purpose with limited operative period, which could be 90 to 180 days. The appellant submits that no separate royalty is paid by them to the supplier for the use of the Time Bound Software. Time Bound Software has separate and independent identification vis a vis FPP (Fully Packaged Product) software, which is without any time limit. The importer claims that a separate code is maintained for FPP in company's internal sales / accounting system to facilitate identification and revenue generation considering the fact that time bound software falls under non revenue generating category. Time Bound Software is a non-commercial shipment and the transaction value for the same is the cost of media including replication cost alone. 7.1 The importer appellant submits that both the items namely "Time Bound Software" and "Beta Software" have been imported on a Compact disk (CD/DVD); these software from the supplier are at the price equivalent to the media cost only since no other cost is involved. The appellant further states that they are not selling "Time Bound Software" as they are available for specific purposes such as test....
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....rize the same in the market". The impugned order says that intrinsic value and nature of both "Time Bound Software" and identical software with no time restriction are same and therefore the money value cannot be lower than the value of identical software without time limit. The impugned order gives the findings that valuation of "Time Bound Software" is to be determined as per Rule 4 of the Customs Valuation Rules, 2007, which is for determination of the transaction value of identical goods. 9.1 However, we are not in agreement with the findings of the impugned order in case of valuation of "Time Bound Software" , when "Time Bound Software" has got the life of only 90 days to 180 days whereas identical software (FPP Software) with which impugned order compared and which has got no time limit, cannot have same values and they cannot be called identical or similar products. Therefore, to decide on the valuation of "Time Bound Software", which is one of the imported items the present case, one has to go beyond Rule 4 of the Customs Valuation Rules 2007 as the value of identical goods which are imported around the same time is not available in this case. It has to be noted that Rule ....