APEX COMPUTERS PVT. LTD. Vs. CC (AIRPORT)

JUDGEMENT

(1.) THE appellant is aggrieved with the Order -in -Original No. 7/99 dated 16.6.1999' passed by the Commissioner of Customs (Airport) Chennai holding that the hardware and software is required to be invoiced together as given in the revised invoice submitted by the importers and the goods should be assessed accordingly. The appellant -importer had imported computer parts and accessories and submitted separate Bills of Entry of clearance of these items along with software declared in the invoice only as Driver/Installation software of the hardware items like Mother boards, VGA Cards and CD Rewriter. The department took the view that as this software was supplied along with individual hardware, they were to be clubbed together for the purpose of assessment. The importer had availed the benefit of Customs Notification No. 20/99 as applicable to "Information Technology Software" with NIL rate of customs duty. However, the department proceeded on the ground that these software were not eligible for the benefit of exemption as they were required to work along with mother boards, VGA cards and CD Rewriter which was hardware and therefore the value of the hardware and software was required to be taken together and not in split format.

(2.) WE have heard Shri S. Murugappan, Ld. Advocate for the appellant and Shri A. Jayachandran, Ld. DR for the respondent.

(3.) LD . Advocate submitted that the issue pertaining to second classification and assessment of hardware and software was clarified by the Central Board of Excise and Customs by their Circular No. 51/2002 -Cus dated 12.8.2002 clarifying that they are required to be separately classified under respective appropriate heading and assessed separately. He also relied on the Apex Court's judgement rendered in the case of PSI Data Systems Ltd. v. CCE wherein the Apex Court held that a computer and its software are distinct and separate, both as a matter of commercial parlance so also upon the material on record. The Apex Court further held that their value is to be separately assessed and cannot be assessed together. He submitted that in view of the Board's circular and the Apex Court judgement (supra) the appellant's prayer for classifying the software and assessing them separately and claiming exemption under Notification No. 20/99 -Cus. Dated 28.2.1999 is required to be upheld and the impugned order deserves to be set aside.