AI Drafter 
TaxTMI 
TaxTMI 
2008 (10) TMI 219
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....as received from Kalo Holdings Corp. L.L.C.(USA) 14, Rutland Court, London. (b) On the basis of an information, a copy of the manufacturers invoice of M/s Technost Systemi (Olivetti Group) No. 5023400137 dated 27-3-2003 prepared on Kalro Holdings Corporation was procured from the office of Swiss Airlines (who transported the consignment) showing the value of said consignment as Euro 17,90,000 and the description of the goods as "Online Computer Hardware & Software". (c) As the goods were found to have been mis-declared in description and value, the same were seized but subsequently provisionally released on execution of a bond and on collection of duty on the higher value and adopting classification under Chapter Heading 8479.9090. (d) As the investigation was getting delayed, a show cause notice dated 7-10-2003 was issued proposing extension of time limit for issuing the show cause notice in terms of Section 110(2) of the Customs Act, 1962. An order dated 21-10-2003 was issued extending the time limit. (e) The appellant filed appeal before the Tribunal against the order dated 21-10-2003 of the Commissioner extending the time limit and some orders were passed from time ....
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.... placed on such invoice of transaction between third parties is not proper. (c) The consignment imported at Delhi was only Hardware; the software was cleared subsequently through Chennai for a total value of 16 lakh Euro and no duty was payable on the software as the same were fully exempted. (d) Though Kalo Holdings Corp, London might have entered into a composite contract with their suppliers in Italy for a sum of 17,90,000 Euro, the appellant had dealings only with Kalo Holdings Corp. London. They had a supply agreement dated 27-1-2003 and a proforma invoice dated 27-1-2003 was issued by them indicating separately the price of hardware and three types of software. In pursuance of the supply agreement, a LC was opened on 6-3-2003; the entire amount of 21,50,000 Euro was transferred through normal banking channel on 5-5-2003. (e) Kalo Holdings Corp. London supplied the consignments in two stages i.e. Hardware (imported through Delhi) under invoice COL BEST 05A for a value of 5,50,000 Euro and supplied the software, (imported through Chennai) covered by invoice COL Best/05B for a value of 16,00,000 Euro. (f) The Department has not proved that there was import of softwar....
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.... is relating to supply of "On line lottery terminal" and specifies the configurations. It also specifies the shipment schedules. The proforma invoice dated 27-1-2003 refers to specially written software on M-380 Model Terminal. Supply agreement also envisages opening of LC and supply of software within three months from the date of receipt of LC. (b) The LC has been opened in March, 2003 and the money has been transmitted on 5-5-2003. The attempt of the appellant to link the supplies to the import made in September, 2003 at Chennai to payments made in May, 2003 does not sound logical. What was imported at Chennai was one CD weighing 500 grms but declared to be 3000 CDs. Later on they explained that CD contain three software programmes and each of the software programme can be utilised in maximum of 1000 machines. (c) The entire system has come in Delhi. What was imported at Delhi is "an integrated system" and there is no justification for the break up as hardware and software. (d) He also produced information downloaded from internet relating to package of "Point of Sale Lottery System" "Lotto Sorcerer, For the serious lottery player" and submitted that the lottery system ....
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....f the Commissioner dated 21-10-03 extending time limit for issue of show cause notice and the Tribunal issued orders fixing deadlines for issue of show cause notice, even though the overseas investigation was underway. Faced with deadline fixed by the Tribunal for issue of show cause notice and the need to gather evidence through overseas investigation, the Department has followed the via media and issued the show cause notice with right to issue addendum. Without commenting on the orders passed by the Tribunal, we find that when the evidence have been received in overseas investigation, the same have been made available to the noticee before decision is taken by the adjudicating authority. We do not find anything wrong in this. If the evidence was relied without disclosing to the noticee, then that would have been in serious violation of principles of natural justice. 6.5 A submission has been made that unsigned and unattested photocopy of a report of Italian Customs have been relied. Documents have been obtained through Govt. Agencies of other Countries in pursuance of mutual arrangements for assistance in investigation and the documents have been received through diplomatic c....
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....oftware at Euro 400,00 per terminal for the terminal applications. Euro 600,00 per terminal for the Database server, and Euro 600,00 per terminal for the transaction server." 7.2 In pursuance of the agreement proforma invoice dated 27-1-2003 was issued which gives the break-up of the prices as follows: Qty. Description Unit Rate Total amount in Euroes 1000 M 380 point of sale terminals 650.00 550000.00 1000 Specially written software for data processing on M380 model Terminal (including ownership rights) 400.00 400000.00 1000 Customs Data processing software for transaction central system (including ownership rights) 600.00 600000.00 1000 Customs written data processing software for database system (including ownership rights) 600.00 600000.00 7.3 A perusal of the agreement and the proforma invoice indicates that the agreement envisages supply of central system and the terminals which are capable of being connected to the central system. It could be seen that the point of sale terminals are parts of specialised systems for specialised application. This involves selection of random numbers and said selection should be....
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....el for the respondent, fairly, did not dispute that the value of the software that the appellants might sell with their computers, if so ordered by the purchasers thereof, could not be included in the assessable value of the computers. He was, however, at pains tourge that this did not apply to the firm software that was etched into the computer, this is not even the appellant's case. 12. In the first place, the Tribunal confused a computer system with a computer, what was being charged to excise duty was the computer. 13. Second, that a computer and its software are distinct and separate is clear, both as a matter of commercial parlance as also upon the material on record. A computer may not be capable of effective functioning unless loaded with software such as discs, floppies and C.D. rhoms, but that is not to say that these are part of the computer or to hold that, if they are sold along with the computer, their value must form part of the assess able value of the computer for the purpose of excise duty. To give an example, a cassette recorder will not function unless a cassette is inserted in it; but the two are well known and recognised to be different and distinct arti....