The assessee was engaged in the manufacture of ‘safety equipment’ falling under Heading No. 8471 19 00 of the Central Excise Tariff Act, 1985. It developed a software called V SAMS and V TAMS and supplied separately to the customers to be loaded in the computer of the customer, who procured the safety equipment from the assessee. The Adjudicating Authority held that the said software was also to be categorized along with the safety equipment at the rate applicable to the safety equipment. On appeal to Tribunal, the assessee contended that the software could not be classified along with the safety equipment to be taxed as safety equipment.
The appellant relied on the judgment of the Hon’ble Apex Court in the case of CCE v. Acer India Ltd. 2004 (172) ELT 289. The Hon’ble Apex Court held that even operational software does not form an essential part of the hardware. In the present case, the device cleared by the appellant containing embedded software and has suffered duty along with the device. We are dealing with a software to retrieve data from the said device for monitoring and follow-up We note that the lower authorities have inter-mixed the embedded software with the customized software supplied latter for monitoring and data retrieval from the device. 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.
In the view of above Where assessee, a manufacturer of safety equipment, had developed a software and supplied separately to customer to be loaded in computer of customer, who procured safety equipment from assessee, said software could not be considered as part and parcel of safety equipment to suffer duty as applicable to safety equipment.
Citation: [2018] 96 taxmann.com 465 (Chennai – CESTAT)