- (1.) Out of the three appeals which have come up for hearing, two are filed by the Assessees and one by the Department. Though the issue is common, only the periods are different. Since the imports were of different ports, it had given rise to three proceedings for which show cause notices were issued. The issue pertains to undervaluation of the cellular telephones which were imported by the two Assessees herein. These cellular phones were operated under the CDMA technology. The Assessees had sought to clear the goods by classifying them under Custom Tariff Heading 8525.20.17 though there was a dispute in this behalf also. The same was ultimately resolved by court in favour of the Assessees.
(2.) Along with the cellular phones, the Assessees had also imported CD -ROMs (Software) which according to the Assessees were not the integral part of the phones but were meant for upgradation of the cellular phones in future as and when required. The dispute is as to whether the value of the said software was to be included while arriving at the transaction value of the cellular phones and for the purpose of payment of duty.
(3.) Whereas the Department wants to include this value of software, the Assessees are resisting that. In the appeal which is filed by the Department, show cause notices were issued for inclusion of the value of the software. As mentioned above, in these show cause notices, the Department has also sought to change the classification of the goods. While the issue about classification was decided by this Court, insofar as the second issue of inclusion of value of software was concerned, the same was remitted back to the Customs, Excise and Service Tax Appellate Tribunal (hereinafter referred to as 'CESTAT') for fresh consideration.;