Customs, Excise and Gold Tribunal Mumbai Commissioner Of Customs vs Hewlett Packard India Ltd. on 7 March, 2006 Equivalent citations: 2006(107)ECC49, 2006ECR49(TRI.MUMBAI), 2006(199)ELT317(TRIMUMBAI) ORDER Jyoti Balasundaram, Vice President 1. The above appeals involve common issues and are hence heard together and disposed of by this common order. 2. The facts giving rise to appeal No. C/391/02 are that on 24.9.2001 M/s. Hewlett Packard India Ltd. (hereinafter referred to as "HP India") imported a consignment of multifunction machine namely, printercumscannercumfax machine Model HP Officejet V40 Service and also "printer software" recorded on a compact disk, and sought classification of the printer under Customs Tariff Heading 8471.60 attracting basic customs duty @ 15% ad valorem and software under Chapter Heading 85.24 and claimed exemption from duty in terms of serial No. 285 of the table to notification 17/2001Cus. The invoice under which both the items were imported did not indicate the value of the items separately and a composite price of US$ 150.27 was indicated therein. Hence the importers indicated the following value in the bill of entry filed for assessment of the imported goods: (1) Value of printer US$ 147.57 (2) Value of software US$ 2.70 The department was of the view that both software and printer are classifiable under Chapter Heading 84.71 of the Customs Tariff and after due process of adjudication, the Assistant Commissioner passed order dated 20th October, 2001 classifying the printer and the software under CTH 84.71. However, the value declared for the software was not questioned by the department. On appeal filed by HP India, the Commissioner of Customs vide order dated 6.2.2002, set aside the adjudication order accepting the importers' contention that printer and software are classifiable separately under CTH 84.71 and 85.24 respectively and accepting the value of the software declared by the importers. The Revenue challenged this order before the Tribunal which vide its order dated 11.6.2003 , held that both items are classifiable separately under the headings claimed by the importers, but held that by virtue of Section 19 of the Customs Act, 1962, the value of software is includible in the value of the printer. This order was challenged by the importers before the Hon'ble Bombay High Court which by its order dated 26.4.2005, set aside the Tribunals order and remanded the case to the Tribunal for deciding the appeal afresh in the light of the apex court's decision in CCE v. Acer India Ltd. . 3. In appeal No. C/110/05, the goods imported are various models of laser printer and Inkjet printer along with software wherein classification of printers was claimed under Customs Tariff Heading 84.71 and software under CTH 85.24 read with exemption in terms of serial No. 231 of the table to notification 20/99Cus/similar exemptions under successor notifications. As the invoice produced for assessment of the goods did not indicate the value of software separately, the value of software was arrived at by the importers as under: (1) Cost of blank CD US$ 1.20 (2) Cost of software US$ 1.00 (3) Cost of recording and packing US$ 0.50 The value of printer software was arrived at as US$ 2.70 in the above manner, irrespective of the printer model. Initially the assessments were made provisional and were finalised by the Deputy Commissioner's order dated 19.9.2002 holding that (a) printer is classifiable separately under CTH 84.71 by virtue of Note 5(D) to Chapter 84; (b) software imported along with the printer is classifiable under CTH 85.24 by virtue of Note 6 to Chapter 85; (c) declared value of software is acceptable by virtue of Rule 7A of the Customs Valuation Rules, 1988; and (d) software is exempt from payment of customs duty. The adjudicating authority also relied upon the order dated 6.2.2002 of the Commissioner (Appeals) to arrive at the above conclusion. As that order was set aside by the Tribunal, the Revenue filed an appeal before the Commissioner (Appeals) under Section 129D(2); the importers filed crossobjections specifically contending inter alia that the value of software declared was reasonable in accordance with Rule 7A and that this value was accepted by other Customs Houses, and produced evidence in this regard. The department's appeal was allowed by the Commissioner (Appeals) in view of the Tribunal's decision dated 11.6.2003; the importers have thus filed appeal No. C/110/05 against the Commissioner (Appeals)'s order dated 25.11.2004. 4. We have heard both sides. 5. We find that the software is imported in the form of CD which contained driver software and other utility/application software such as optical character recognition software in order to enable the scanned text to be converted to word file, photoprint software so as to enable the printer to take colour print out of photographs. The pri