O.R.G. SYSTEMS BARODA versus COLLECTOR OF CENTRAL EXCISE, VADODRA

O.R.G. SYSTEMS BARODA versus COLLECTOR OF CENTRAL EXCISE, VADODRA

The Supreme Court held that the value of peripheral devices and systems software could not be included in the assessable value of computers and that the computers were not liable for excise duty in the appellant's hands. Likewise, the value of service charges recovered under service contracts was not includible. The orders of the excise authorities and Tribunal were set aside in light of PSI Data Systems Ltd, v. CCE.

Parties
Appellant: O.R.G. SYSTEMS BARODA; Respondent: Collector of Central Excise, Vadodara
Jurisdiction
India
Judgment Date
21 July 1998
Procedural Posture
Civil Appeal / Appeal From Central Excise & Gold (control) Appellate Tribunal Judgment
Outcome
Appeal allowed; impugned demand including penalty set aside.
Legal Topics
Computers and Software Under Excise Law, Assessable Value of Computers, Peripheral Devices and Service Charges Includibility, Tariff Item 33 DD
Excise Law Computers and Software Under Excise Law Assessable Value of Computers Peripheral Devices and Service Charges Includibility Tariff Item 33 DD

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Parties

O.R.G. SYSTEMS BARODA

Appellant

Collector of Central Excise, Vadodara

Respondent

Procedural Posture

Civil Appeal / Appeal From Central Excise & Gold (control) Appellate Tribunal Judgment

Legal Issues

  1. 1 Whether computers manufactured and cleared by other firms (OSI and Orbit) are liable to be treated as manufactured and cleared by the appellant and liable for excise duty
  2. 2 Whether the value of peripheral devices and/or computer systems sold by dummy unit along with computers is includible in the assessable value of the computer
  3. 3 Whether the amount or value of service charges recovered under service contracts can be included in the assessable value of the computer

Ratio Decidendi

The Supreme Court held that the value of peripheral devices and systems software could not be included in the assessable value of computers and that the computers were not liable for excise duty in the appellant's hands. Likewise, the value of service charges recovered under service contracts was not includible. The orders of the excise authorities and Tribunal were set aside in light of PSI Data Systems Ltd, v. CCE.

Court Disposition

Appeal allowed; impugned demand including penalty set aside.

Orders

  • Impugned demand including the levy of penalty is set aside.
  • No order as to costs.