TaxTMI 
TaxTMI 
1998 (7) TMI 93
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....controversial issues raised in these appeals. 2. Briefly stated the facts are the following :- The appellant is engaged in the manufacture of computers falling under Tariff Item 33-DD from May, 1982 when they got the necessary licence. Prior to May, 1982, the appellant got the computers manufactured by (a) M/s. Digital Systems International (for short `DSI') and (b) M/s. Orbit Electronics (for short `Orbit') by suplying raw materials and also by supplying specifications and designs. The computers so manufactured by the appellant, as stated above, as well as those manufactured by the apellant after May, 1982 were marketed by M/s. Adprint Services Limited, Baroda (for short 'Adprint'). At this stage, it is necessary to make it cle....
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.... 10 lacs, is sustainable in the facts and circumstances of the case. 4. The authorities, overruling the objections raised by the appellant, held that the Computers manufactured by DSI and Orbit must be deemed to have been manufactured by the appellant and as such liable for excise duty. It was also held that the value of peripherals and systems software supplied is includible in the value of the computers. Likewise, the Revenue held that non-disclosure of the values of service charges, peripherals and systems software attracts levy of penalty. Accordingly, the demand was raised against the appellant in a sum of Rs. 3,32,96,010.58 and a penalty of Rs. 25 lacs was also levied. Before the Tribunal, the appellant got some relief on dut....
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....6. In these appeals, we heard arguments of Counsel on both sides. Naturally, the learned Counsel, Mr. Ganesh, appearing for the appellant, placed reliance on the judgment of this Court in PSI case (supra). This Court in PSI Data System's case considered indentical issues and Bharucha, J., speaking for the Bench, held as follows :- "The appellants before us have sold only a computer, or a computer along with software, and the software might have been imported or bought out. Some contracts in this bahalf are lump-sum contracts and some are for the computer and the software separately, Sample contracts are on the record. Learned Counsel for the appellants submitted that the test that had been applied by the Tribunal in the impugned....
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.... capabilities and a computer programme is defined to mean a set of instructions expressed in words, codes, schemes or in any other form, including a machine readable medium, capable of causing a computer to perform a particular task or achieve a particular result. Interestingly, the Copyright Act defines 'literary work' to include computer programmes, tables and compilations including computer data bases. Reference was also made to the aforementioned contracts which indicate the distinction that buyers made between the computer and the software. In the appeals of Wipro Information Technology Limited and PSI Data Systems Limited, the charges for installation of the computer and the training of the purchaser's personnel to operate and main....
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....e assessable value of the cassette recorder. Just so, the value of software, if sold along with the computer, cannot be included in the assessable value of the computer for the purposes of excise duty. Having regard to the view that we take, it becomes unnecessary to deal with the subsidiary arguments on behalf of the appellants and the intervenor, M/s. Digital Equipment (India) Limited." 7. The above judgment of this Court completely answers the principal issues in controversy in favour of the appellant. In the case on hand, it cannot be disputed that the computers manufactured and supplied by Orbit, DSI or the appellant (from May, 1982 onwards) were complete computers, which had a Central Processing Unit, with "etched-in" or "....