AIRCEL CELLULAR LTD. Vs. COMMR. OF CUS.

JUDGEMENT

(1.) These appeals by the assessees are directed against the common order passed by the Customs, Excise and Service Tax Appellate Tribunal [The Tribunal] in Miscellaneous Order Nos.40351 and 40354 of 2014 dated 04.02.2014. By the said order, the Tribunal directed the assessees to pre-deposit in the case of Aircel Cellular Ltd., a sum of Rs.10,21,25,614/- and in the case of Aircel Ltd., a sum of Rs.24,67,77,929/- as condition precedent for entertaining the appeals. The assessees were granted eight weeks' time to make such deposit.

(2.) The assessees are providers of mobile telecom services and they imported certain equipments and software for running such equipments. The equipments, which were imported by the assessees are particularly classified into four categories viz.,(i) Mobile Switching Centre (MSC), (ii) Base Station Controller (BSC), (iii) Base Transceiver Station (BTS) and (iv) parts of the above equipment classifiable under Chapter Heading 85.25. The aforesaid first three equipments needed software for its functioning and such software was preloaded in the equipment. The assessee also imported media said to contain such software, in some cases in the same consignment as the equipment and in some cases in separate consignments. The assessee did not furnish separate values for each equipment and each software. It is to be noted that at the relevant point of time, the computer software was exempted from customs duty. Therefore, the assessee did not pay any customs duty on the value said to be that for the software and paid customs duty as applicable for the value declared to be that of the hardware. After the goods were cleared, the Revenue on intelligence obtained certain information stating that the equipment that had been cleared was actually pre-loaded with the software having nature of embedded software and the software imported separately was only for the purpose of declaring the value of the software. Therefore, the Revenue contended that the separate import of software is a dummy transaction and that the value of the equipment should have been assessed by including the value of software and duty on the combination of the software and hardware should have been paid at the rate applicable to hardware.

(3.) Show cause notices were issued alleging that there was mis-declaration and the goods appear to be liable to confiscation and duty. After affording an opportunity to the assessees, the show cause notices were adjudicated and the duty was demanded as mentionedalong with penalty equivalent to the amount of duty.