Custom, Excise & Service Tax Tribunal
M/S. Siemens Ltd vs Cce & St, Pondicherry on 29 January, 2018
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL SOUTH ZONAL BENCH AT CHENNAI E/MISC/40026/2018 & E/332/2010 (Arising out of Order-in-Appeal No. 30/2010 (P) dated 24.02.2010 passed by the Commissioner of Central Excise (Appeals), Chennai). M/s. Siemens Ltd Appellant Vs. CCE & ST, Pondicherry Respondent
Shri Raghavan Ramabhadran, Advocate,
for the Appellant
Shri S. Govindarajan, AC (AR)
for the Respondent
Honble Ms. Sulekha Beevi, Member (Judicial)
Honble Shri B. RAVICHANDRAN, TECHNICAL MEMBER
Date of Hearing/Decision: 29.01.2018
FINAL ORDER No. 40233/2018
Per: B. Ravichandran
The appellant has filed miscellaneous application for change of cause-title to the new name M/s. Siemens Ltd. instead of M/s. Siemens Building Technologies Pvt. Ltd. They have submitted necessary supporting documents to this effect. Accordingly, the miscellaneous application for change of cause-title is allowed and the appeal itself is taken up for hearing and disposal.
2. The appeal is against the Order dated 24.02.2010 of the Commissioner (Appeals), Central Excise, Chennai. The appellants are engaged in the manufacture of Electronic Circuit and Safety Equipment falling under CETH 8471 1900 of the CET liable to Central Excise duty. The said goods are cleared on payment of duty. The dispute in the present appeal relates to certain software separately supplied, to be loaded in the computer of the customer, who procured the electronic circuit and safety equipment from the appellants. The Revenue help a view that the said software is also to be categorized along with the said equipment at the rate applicable to the equipment. The appellant resisted the demand on the ground that the equipment was supplied along with integrated and embedded software to make it fully functional. To monitor the functionality they have developed customized software and supplied separately, which is loaded in the computer connected to the safely equipment. The main function of the software loaded in the computer is to monitor the data of access details from the said safety equipment. Accordingly, it is the view of the appellant that these are not to be classified along with the equipment to be taxed as safety equipment. They have paid Central Excise duty on this software as a software classifiable under 8523/8524.
3. We have heard both sides and perused the appeal records.
4.1 We note that the safety equipment manufactured and supplied by the appellant is essential access control system used for restricting entry to a particular area or a room by fixing the said system in the door. The said system consists of main controller and various other components like card reader, magnetic controls, lock, power supply unit etc. The controller unit contains printed circuit board with required components like ICs, transformers etc. The basic operating software is loaded in the microprocessor of the said system. Once installed and supplied with power, the system controls the entry of any person based on the approved access cards. The software now in dispute is developed by the appellant for specific use of the customer. This is mostly a time and attendance management software which gives access to the controlling manger to know the entry/exit of various persons who entered through the access controller. Such software is supplied as per the requirement of the client in a form of CD and it is loaded in the premises of the client in their computer. This software essentially maintains attendance register. This is not a software for physical access control which is loaded in the system and suffered duty as part of device. In other words, the said integrated software which makes the device functional suffered tax as part of the device. This is not contested by both sides. In order to access the data including details of time and person who accessed the restricted area, the client would like to extract such data from the device for which the appellant develops a program and loads it in the computer of the client so that they can capture the data and also use it in whatever manner they want. This is essentially an attendance monitor system where the manager will have details of persons, time of their entry etc., extracted from the access control device. We are of he considered opinion that while the software as firmware supplied by the appellant has to suffer duty as applicable to the device, the same cannot be extended to software supplied separately to get details from the device. Admittedly, the access control device can work without this software. The data which is captured by such device is retrieved and used by the client using the present software.
4.2 Revenue emphasized that Note 6 of Chapter 85 which reads as under:-