The Chennai bench of the CESTAT, last day held that the software which is supplied separately for loading in the computer of the client linked to the devise for retrieval and monitoring of data cannot be considered as part of the device for the purpose of imposing excise duty.
The appellants, engaged in the manufacture of Electronic Circuit and Safety Equipment, cleared the same on payment of duty.
Particular software was separately supplied, to be loaded in the computer of the customer, who procured the electronic circuit and safety equipment from the appellants. The department treated the same as part of the device and taxed accordingly.
The appellant-assessee maintained that the equipment was supplied along with integrated and embedded software to make it fully functional. To monitor the functionality they have developed customized software and supplied separately, which is loaded in the computer connected to the safely equipment. The main function of the software loaded in the computer is to monitor the data of access details from the said safety equipment and therefore, the same must be taxed separately.
The bench, after considering the fact of the case in depth, observed that “it is clear that a devise should suffer Central Excise duty along with essential operating software which is part and parcel of the same. The same has been the case here. However, the software which is supplied separately for loading in the computer of the client linked to the devise for retrieval and monitoring of data cannot be considered as part and parcel of he said access control device.”
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