Ramesh Ranganathan, J. - (1.) These appeals, under Sec. 130 of the Customs Act, 1952, are preferred against the miscellaneous orders passed by the Customs, Excise & Service Tax Appellate Tribunal, South Zonal Bench at Bangalore (CESTAT for short) in Miscellaneous Order Nos. 27769 -27781/2013 dated 3.7.2014 and 27.10.2014.
(2.) The dispute, in the appeals filed before the CESTAT, related to the validity of the adjudication orders levying customs duty, interest and penalty on the import of dense wavelength division multiplex equipment (DWDM), and certain imported CDs allegedly used for its functioning. All the appellants are connected with these imports. While some of them are importers, some others are foreign suppliers. The principal importers were M/s. Prithvi Information Solutions Ltd. (PISL for short) and M/s. VMC Systems Ltd. (VMCL for short).
(3.) In cases where the software is embedded in the equipment itself, and not supplied separately, the value of such embedded software is included in determining the assessable value of the equipment and it is only if the software is not embedded, and is supplied separately, can it not be included in the value of the equipment. On the ground that embedded software was shown separately as customised software only to evade customs duty, the adjudicating authorities, besides demanding differential duty on the value attributable to the so called embedded software, and interest thereon, had also imposed penalties on PISL and VMCL as well as the overseas suppliers M/s. Huawei Technologies Co. Ltd. (HTCL), M/s. Sojitz Corporation (SC) their financial partner based in Japan, several individuals working for these organizations, and Punjab Communications Limited (PCL), a public sector undertaking, which had participated in the auction and had entrusted supplies to VMCL. BSNL was also visited with penalty. In the appeals, filed against the orders passed by the adjudicating authorities, the CESTAT was mainly called upon to examine whether PISL and VMCL had deliberately shown the software, embedded in the system imported by them and supplied to BSNL, as separately imported customised software only to evade payment of customs duty on the software portion of the imported equipment.;