Preloaded Software On Imported Navigation Devices Liable To Customs Duty: CESTAT

The Bangalore Bench of Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has held that value of preloaded software to be included in assessable value of imported navigation devices and is liable to customs duty. Dr. D.M. Misra (Judicial Member) and Pullela Nageswara Rao (Technical Member) were addressing the issue of whether the value of software preloaded/ etched into the imported navigation systems, be included in the assessable value of the said navigation systems and confiscation of goods and imposition of penalties sustainable. The assessee/appellant had declared import quantity as 20,000 numbers (in fact 20150 numbers) of touch media device, its classification under CTH 85437099 and total assessable value as Rs.3,71,58,148/- in the Bill of Entry. Later imported paper software licence against Bill of Entry dated 12.04.2010 declaring its value as Rs. 1,89,13,883/- without payment of duty availing exemption under Notification No.21/2002-Cus. dated 01.03.2002. In the impugned order, the Commissioner adding the value of software licence declared in the Bill of Entry to the assessable value of the imported hardware viz. touch media device, enhanced the value to Rs.5,60,72,031/- and confirmed differential customs duty and imposed penalties on the assessee. The assessee submitted that the value of the software which has been imported separately cannot be added to the value of the touch media device imported earlier. The revenue submitted that the software imported along with touch media device has been etched pre-loaded; affixed with serial number of the licence in the device, hence, ought to be included in the value of the device since the software is a part of the device itself. The Tribunal observed that undisputedly the software which was imported separately on 12.04.2010 had already been preloaded/ etched into the touch media device navigation system, a fact not disputed by the assessee in the statements furnished to the Department by the Director of the assessee on 03.12.2010. The assessee has categorically said that the licence key number imprinted on the device and the software licence keys had already loaded into the devices when imported. Thus, it is clear that portable navigation system imported also have the licence key imprinted on them and the software licence keys are already loaded to the said system, added the bench. The bench found no reason no interfere with the order of the Commissioner enhancing the value of the touch media device by including the value of the licence software imported subsequently and confirmed the differential duty demanded with interest and imposition of penalty. In view of the above, the Tribunal dismissed the appeal. Case Title: M/s. Lakshmi Access Communications Systems Pvt. Ltd. v. Commissioner of Customs Case Number: Customs Appeal No.2006 of 2012 Counsel for Appellant/ Assessee: B.N. Gururaj Counsel for Respondent/ Department: Maneesh Akhoury Click Here To Read/Download The Order

Preloaded Software On Imported Navigation Devices Liable To Customs Duty: CESTAT

Mehak Dhiman

Tags