Solution Infotech (I) Pvt. Ltd. Vs Commissioner of Customs (CESTAT Delhi)
The appellant had imported hardware locks (HASP dongles) from M/s Aladdin Knowledge Systems Ltd., Israel, through a Bill of Entry dated 08.06.2009, declaring the goods as hardware locks with an FOB value of US$ 3 per piece. During departmental inquiry, the appellant informed the department that DCM software licences corresponding to the imported hardware locks were regularly downloaded through the internet and that customs duty had not been paid on the software cost. The appellant undertook to pay the applicable customs duty. Consequently, the Bill of Entry was reassessed by including the value of the downloaded DCM software licence, enhancing the value of each hardware lock to US$ 8. The appellant paid the enhanced customs duty of Rs. 7,67,474 along with interest of Rs. 48,457 on 17.07.2009 under protest.
Subsequently, the department found that similar imports made between April 2007 and June 2009 had also excluded the value of the downloaded software licences from the assessable value. A show cause notice dated 15.04.2011 proposed recovery of differential customs duty of Rs. 23,73,310 on the software licence value of Rs. 1,88,81,348, appropriation of the amount already deposited, interest under Section 28AB of the Customs Act, 1962, and penalty under Section 112(a). The demand was confirmed by the adjudicating authority, and the appellate authority upheld the enhancement of value while observing that intimation regarding software downloads had not been furnished to the proper assessing authority. The appellant challenged that order before the Tribunal.
