Commissioner of Central Excise, Pondicherry Vs. Acer India Ltd. - Court Judgment

Excerpt:
- [e.s. venkataramiah and; m.m. dutt, jj.] section 5 of the uttar pradesh imposition of ceiling on land holdings act, 1960 provided that on and from the com- mencement of the u.p. imposition of ceiling on land holdings (amendment) act, 1972, which came into force on 8.6.1973, no tenure-holder would he entitled to hold in the aggregate throughout uttar pradesh, any land in excess of the 'ceiling area', as defined in sub-s.(2) ors.3 of the act. since smt. anma begum, the tenure-holder was holding in the aggregate land in excess of the ceiling area, she became liable to surrender the surplus land. pursuant to a general notice issued under s.9 to all tenure-imlders, holding land in excess of the ceiling area, she did not file any state- ment before the prescribed authority- after the publication of the general notice but before she could he served with a notice under s.10(2) she died. the prescribed authority not knowing of her death issued a notice under s.10(2) calling upon her to show cause why the statement prepared by him under s. 10(1) should not he taken as correct. the father of respondent no. 4, one of the .heirs, filed objections which were over-ruled, and it was declared that smt. arena begum was holding 17.37 hectares of land as surplus land. the district judge holding that since the tenure-holder was dead by the time the notice under s. 10(2) was issued, the order of the prescribed authority passed against a dead person could not be allowed to stand, allowed the appeal, set aside the order of the prescribed authority and remanded the case. fresh notices under s.10(2) were issued to the heirs. respondent no. 3 contended that she held only 91.12 bighas of land as her onefourth share and that 12 acres of land had been transferred through registered sale deed far adequate consideration and in good faith and the land to that extent should be excluded from the holding while determining the surplus land and that the determina- tion of the surplus land should be made on the basis of the share held by each of them as an individual tenure-holder. the prescribed authority held that there was no surplus land that could be claimed from the holding in question since none of the heirs of deceased tenure-holder was in possession of the land in excess of the ceiling area. the appeal by the state government against the order of the prescribed authority was dismissed by the civil judge holding that smt. anma begum could not be treated as a tenure-holder after her death, and that since none of the heirs of amna begum was holding the land in excess of the ceiling area they were not liable to surrender any surplus land. the petition under article 226 filed by the state gov- ernment was dismissed holding that the state government was not entitled to question the correctness of the orders of the prescribed authority and the civil judge as the order of remand of the case passed by the district judge had become final. allowing the appeal, held: 1. the orders passed by the high court, the civil judge and the prescribed authority are set aside and the case is remanded to the prescribed authority for fresh disposal. [107d]. the reason given by the high court for holding that the contentions urged on behalf of the state government were barred by the rule of res judicata is wholly untenable since the district judge while remanding the case had nut recorded any finding on the merits of the contentions of the parties. he had set aside the order of the prescribed authority passed earlier only on the ground that a proceeding which had been commenced against a dead person was a nullity. he, however, remanded the case to the prescribed authority for fresh disposal in accordance with law after issuing notices to the heirs of smt. amna begum whom he wrongly described as tenure-holders so far as her estate was concerned. the high court was, therefore, wrong in dismissing the writ petition on that ground. [104d-105a] smt. amna begum was alive on 8.6.1973 on which date ceiling on the holdings in the state of uttar pradesh was imposed by s.5 of the act. smt. amna begum became liable to surrender the surplus land in excess of what she could retain in accordance with that section. merely because she had died before the issue of the notice under s.10(2) of the act the liability to surrender the surplus land would not come to an end. [105c]. rule 19 of the uttar pradesh imposition of ceiling on land holdings rules, 1961 framed under the act provides that where a tenure-holder dies before the publication of the general notice under s.9 of the act, such publication shah be deemed to apply to the executor, administrator or other legal representatives and the prescribed authority may proceed to determine the ceiling area applicable to the deceased person as if such executor administrator of other legal representatives were the tenure-holder- it also pro- vides that where a tenure-holder dies before he is served with a notice under sub-s. (2) of s. 10 of the act, the prescribed authority may serve such notice on his executor, administrator or other legal representatives and may proceed to determine the ceiling area applicable to the deceased person as if such executor, administrator or other legal representatives were the tenureholders. [105d-f]. the principle applicable to the determination of the surplus land under the land reform laws in the hands of person holding land is the date on which the ceiling is imposed. [105g] 'the surplus land in the case of a person who held land in excess of the ceiling area on the appointed day had to he determined as an the appointed day even though such person might have died before the actual extent of surplus land was determined -,tad notified. the persons on whom his holding devolved on his death would be liable to surrender the surplus land as on the appointed day because the liabil- ity attached to the holding of the deceased would not come to an end on his death. [i06e-f] raghunath laxman wani v.state of maharashtra, [1971] 3 s.c.c. 391 at page 397 & bhikoba shankar dhumal (dead) by lrs. and others v. mohan lal punchand tathed and others, [1982] 1 s.c.c680, followed. for the purpose of deciding the surplus land which is liable to be surrendered from and out of the estate of smt. arena begum, the relevant date that might be taken into account is 8.6.1973 on which date the ceiling on holdings was imposed and she became liable to surrender the surplus land. her hews or legal representatives together are entitled to retain out of her estate only an extent of land equal to the area which she could have retained in her hands after the imposition of ceiling on land holdings and are liable to surrender the surplus land. [107b-c]order1. heard parties.2. appeals admitted.3. in the case of psi data systems limited v. collector of central excise, : 1997(89)elt3(sc) , it has been held that a computer and its software are distinct and separate items. it is held that a computer may not be capable of effective functioning unless loaded with software, but still these are not parts of computer and even if they are sold along with the computer their value does not form part of assessable value.4. with greatest of respect, to the learned judges concerned, we find ourselves unable to agree with the view that even though a computer may not function without a software, still that would not be part of a computer. section 4 of the central excise act reads as follows :-'4. valuation of excisable goods for purposes of charging of duty of excise. - (1) where under this act, the duty of excise is chargeable on any excisable goods with reference to their value, then, on each removal of the goods, such value shall -(a) in a case where the goods are sold by the assessee, for delivery at the time and place of the removal, the assessee and the buyer of the goods are not related and the price is the sole consideration for the sale, be the transaction value;(b) in any other case, including the case where the goods are not sold, be the value determined in such manner as may be prescribed,(2) the provisions of this section shall not apply in respect of any excisable goods for which a tariff value has been fixed under section 2 of section 3.(3) for the purpose of this section. -(a) ....(b) ....(c) ....(d) 'transaction value' means the price actually paid or payable for the goods, when sold, and includes in addition to the amount charged as price, any amount that the buyer is liable to pay to, or on behalf of, the assessee, by reason of, or in connection with the sale, whether payable at the time of the sale or at any other time, including, but not limited to, any amount charged for, or to make provision for, advertising or publicity, marketing and selling organisation expenses, storage, outward handling, servicing, warranty, commission or any other matter, but does not include the amount of duty of excise, sales tax and other taxes, if any, actually paid or actually payable on such goods.' (emphasis supplied).thus, any amount which a buyer has to pay 'by reason of or in connection with the sale' is part of the transaction value. there are software's without which computer cannot work at all. there may be software's which contain additional or ancillary applications which a customer may want to buy separately. an additional or ancillary application would, of course, be classifiable separately and cannot be included in the value of a computer. but a buyer has to buy software without which the computer cannot work. the computer would otherwise be a dead box, if software, without which the computer cannot work, is not purchased. when one talks of a computer, as understood in the trade, it is not just the box or the hardware. a computer contains of both hardware and the operating software. the price of such software's is thus the amount which a buyer is bound to pay by reason of or in connection with the sale of computers. it appears to us that the price of such software is thus includable in the value for purposes of excise duty. we, therefore, feel that the matter requires reference to a larger bench. the papers may be placed before the hon'ble chief justice of india for appropriate orders.

Judgment:
ORDER

1. Heard parties.

2. Appeals admitted.

3. In the case of PSI Data Systems Limited v. Collector of Central Excise, : 1997(89)ELT3(SC) , it has been held that a computer and its software are distinct and separate items. It is held that a computer may not be capable of effective functioning unless loaded with software, but still these are not parts of computer and even if they are sold along with the computer their value does not form part of assessable value.

4. With greatest of respect, to the learned Judges concerned, we find ourselves unable to agree with the view that even though a computer may not function without a software, still that would not be part of a computer. Section 4 of the Central Excise Act reads as follows :-

'4. Valuation of excisable goods for purposes of charging of duty of excise. - (1) Where under this Act, the duty of excise is chargeable on any excisable goods with reference to their value, then, on each removal of the goods, such value shall -

(a) in a case where the goods are sold by the assessee, for delivery at the time and place of the removal, the assessee and the buyer of the goods are not related and the price is the sole consideration for the sale, be the transaction value;

(b) in any other case, including the case where the goods are not sold, be the value determined in such manner as may be prescribed,

(2) The provisions of this Section shall not apply in respect of any excisable goods for which a tariff value has been fixed under Section 2 of Section 3.

(3) For the purpose of this section. -

(a) ....(b) ....(c) ....(d) 'transaction value' means the price actually paid or payable for the goods, when sold, and includes in addition to the amount charged as price, any amount that the buyer is liable to pay to, or on behalf of, the assessee, by reason of, or in connection with the sale, whether payable at the time of the sale or at any other time, including, but not limited to, any amount charged for, or to make provision for, advertising or publicity, marketing and selling organisation expenses, storage, outward handling, servicing, warranty, commission or any other matter, but does not include the amount of duty of excise, sales tax and other taxes, if any, actually paid or actually payable on such goods.' (emphasis supplied).

Thus, any amount which a buyer has to pay 'by reason of or in connection with the sale' is part of the transaction value. There are software's without which computer cannot work at all. There may be software's which contain additional or ancillary applications which a customer may want to buy separately. An additional or ancillary application would, of course, be classifiable separately and cannot be included in the value of a computer. But a buyer has to buy software without which the computer cannot work. The computer would otherwise be a dead box, if software, without which the computer cannot work, is not purchased. When one talks of a computer, as understood in the trade, it is not just the box or the hardware. A computer contains of both hardware and the operating software. The price of such software's is thus the amount which a buyer is bound to pay by reason of or in connection with the sale of computers. It appears to us that the price of such software is thus includable in the value for purposes of excise duty. We, therefore, feel that the matter requires reference to a Larger Bench. The papers may be placed before the Hon'ble Chief Justice of India for appropriate orders.