RESPONDENT: COMMISSIONER OF CUSTOMSI, DELHI. DATE OF JUDGMENT: 20/01/2000 M.B.Shah, B.N.Kirpal JUDGMENT: Shah,J. Leave granted. Appeal admitted. The short question involved in this appeal is whether custom duty on imported computer software loaded on a hard disk drive is to be levied on the basis of hard disk simplicitor or computer software. Goods imported by the appellant were examined on 9th August, 1995 and were found to be seven pieces of hard disk drive loaded with software. As per the department, custom duty on hard disk drive is leviable under Chapter Heading 84.71 at the rate of 25% and on a computer software it is at the rate of 10% as per the tariff Heading 85.24 read with notification No.59/95 dated 16.3.1995. It is admitted fact that total value of the consignment was Rs.67,75,119/ for seven hard disk drives having software loaded thereon. Value of the hard disk simplicitor would be roughly at the most Rs.60000/. The relevant headings of the Chapter are as under: 84.71 Automatic data processing machines and units thereof; magnetic or optical readers, machines for transcribing data on to data media in coded form and machines for processing such data, not elsewhere specified or included. 8471.70 Storage units. 5% 8471.80 Other units of automatic date processing machines. 20% 8471.90 Other 20% 85.23 Prepared unrecorded media for sound recording or similar recording of other phenomena, other than products of Chapter 37. Magnetic tapes. 85.24 Records, tapes and other recorded media for sound or other similarly recorded phenomena, including matrices and masters for the production of records, but excluding products of Chapter 37. 8524.10 Gramophone records. 40% Discs for laser reading systems; 8524.31 For reproducing phenomena other than sound or image. 25% 8524.40 Magnetic tapes for reproducing phenomena other than 25% sound or image. Other magnetic tapes. 8524.99 Others 40% The Tribunal arrived at the conclusion that as the software was loaded on a hard disk, it would remain to be a hard disk drive on which software was loaded and, therefore, alongwith Chapter Note 5(A) and (B) of Chapter 84, it would be hard disk drive loaded with software and would be taxable under the Heading 84.71 and not 85.24. The Tribunal considered the decision of this Court in PSI Data Systems Ltd. vs. Collector of Central Excise, {1997 (89) ELT 3 (SC)} and observed that it would not be applicable to the facts of the present case. For understanding of computer software and the hard disk, learned counsel for the Customs has produced on record some extracts from Modern All About Hard Disk Drive of BPB Publications, which reads as under: Today Hard Disk Drives are the most common storage device used with the computer system. The hard disk drive is also known as Hard Disk, Hard Drive, Fixed Disk Drive or Winchester Disk Drive. The hard disk drive is used to store data and programs permanently inside the computer. The information stored in the hard disk drive does not get erased when the power supply to the computer is switched off. This device is known as Hard Disk Drive because compared to the other common magnetic storage device, floppy disk, which uses flexible plastic like carrier for the magnetic recording medium; the hard disk drive uses rigid, hard, aluminium or glass as the base for recording medium. xxxx xxxx xxxx Information is stored in the hard drive using the same magnetic recording method, which is used to store songs on a audio tape or movies on a video tape. The audio or video tape does not lose its content when the power supply given to the audio or video recorded is switched off, same way the hard drive also retains the information stored in it, even when the power supply to the hard drive is switched off. He has also pointed out the extract from PC Power Boosting Your PCs Performance written by Stephen J. Dougherty wherein hard disk is given meaning as under: Hard disk. A data storage device that stores the data on metal disks that have a magnetic coating. Hard disk drives provide faster access and larger storage capacities than diskettes. Sometimes referred to as a fixed disk. He further submits