TaxTMI 
TaxTMI 
TaxTMI 
2017 (7) TMI 406
X X X X Extracts X X X X
X X X X Extracts X X X X
....ore than such actual cost with the intent to evade duty of excise on the computers. Accordingly, proceedings were initiated vide issue of SCN dt. 28.04.2005 alleging disproportionate higher abatements with regard to cost of software, demand of differential duty along with interest thereon and imposition of penalties under various provisions of Central Excise law. Adjudicating authority vide impugned order dt. 30.12.2005 confirmed the allegations raised in the SCN and inter alia demanded differential duty liability of Rs. 9,68,37,727/- with interest thereon and imposition of equal penalty. 2. Today, when the matter came up for hearing, on behalf of the appellant, Ld. Advocate Shri Raghavan Ramabhadran made submissions which can be summarised as follows : (1) In view of Hon'ble Apex Court judgement in the case of CCE Pondicherry Vs Acer India Ltd. 2004 (172) ELT 289 (SC), the value of operating software is not includible in the assessable value of computers. Accordingly, for the purpose of arriving at the assessable value of the computer sold by them, the market value of the software less 30% was arrived at for such deduction from the consolidated price of the computer. (2) T....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... against the appellant for its Bangalore factory in first round of adjudication vide Order-in-Original No.15/2003 dt. 15.09.2003. However, the same had been set aside by Tribunal vide Final Order No.530-33/05-EX dt. 30.06.2005 [ reported in 2005-TIOL-848-CESTAT-DEL ] by way of remand to the original authority in view of Hon'ble Supreme Court's decision in the case of CCE Pondicherry Vs Acer India Ltd.(supra). In de novo proceedings, the Commissioner, Bangalore vide OIO No.10/2006 dt. 27.04.2006/05.05.2006 has dropped the entire proceedings holding that there is nothing amiss in the claim of deduction of Rs. 3160/- in respect of operation software and Rs. 11550/- in respect of application software. (7) Ld. Advocate submits that the department had accepted the above order and they have not filed an appeal against the same. In view of the same, when the grounds of appeal and allegations are same for both Bangalore and Pondicherry, the department is not entitled to take a contrary stand in the present proceedings. 3. On the other hand, on behalf of the department, Ld. A.R Shri A. Cletus (ADC), submits the following : (a) That the operation software were imported/purchased....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ters vide their letter dt. 25.08.2000 to the Superintendent of Central Excise, Range-VII, Brindavanam, Pondicherry Division, Pondicherry. From a copy of aforesaid letter available on page 30 in the appeal papers, it is seen that appellant categorically refers to the decision of PSI Data Systems of the Hon'ble Apex Court and informs the department that software as a distinct line item is excluded from the assessable value of personal computers in their Excise Invoices of the appellant. The quantum of such exclusion for different types of software have also been specifically intimated. A Classification/Declaration No.02/2000 was also filed along with the letter. However, it appears that department did not respond or take any action, including any investigation on the veracity of the deduction claimed. Interestingly, the statement of facts annexed to the SCN dt. 28.04.2005 claims that department initiated investigation based on intelligence that "M/s.HP Ltd., are indulging in under valuation of their final products ......". Nonetheless, it is the very letter of 25.08.2000 addressed to the Superintendent of Central Excise, Range-VII, Pondicherry intimating the quantum of deductions....
X X X X Extracts X X X X
X X X X Extracts X X X X
....in respect of software pursuant to the Apex Court's decision in Acer India Ltd. (supra). We find that the Tribunal's order was passed on 30.06.2005. However, the same was not appealed by the department. Be that as it may, in the de novo proceedings, the Commissioner vide OIO No.10/2006 dt. 5.5.2006 dropped the entire proceedings, inter alia, holding that deduction of software cost has to be on the basis of amount equivalent to market prices of the comparable product, that the cost of operating software was not the cost of CD alone but other costs such as royalty, warranty, after-sales service etc. are to be taken into account, that the intrinsic value of software is to be calculated by taking into account not only the purchase price but other costs, and that department charged that appellant overstated the value of software in undervalue the computer do not stand on firm ground. We have been informed by the learned advocate that this decision has been accepted by the department and has not been appealed against. If this is so, the department will be precluded from further agitating the matter in view of the ratio laid down by higher appellate courts, for example In Boving ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....al involving identical issue was not pressed and was therefore, dismissed. The respondent having taken a conscious decision to accept the principles laid down in Pepsico India Holdings Ltd. (supra) cannot be permitted to take the opposite stand in this case. If we were to permit them to do so, the law will be in a state of confusion and will place the authorities as well as the assessees in a quandary." In CCE Mumbai Vs Bigen Industries Ltd. [2006 (197) ELT 305 (SC)], the Hon'ble Apex Court inter alia ruled as under : "10. The adjudicating authority as well as the Commissioner (Appeals) have proceeded on the basis as if the order passed by the Trade Mark Registry registering the trade mark in favour of the assessee is erroneous and of no consequence. The Tribunal is right in observing that once the trade mark has been registered in the name of the assessee by the statutory authority authorised to do so recognizing the assessee to be the sole proprietor of the trade mark for India, the adjudicating authority as well as the Commissioner (Appeals) erred in denying the benefit of the notification under consideration. This apart, the earlier decision of the Tribunal in Bigen Indus....