Bharti Airtel - Huge Win for Revenue in Rs. 440 Crores Case
"WE are reminded of an overcautious passenger traveling by bus who purchased two tickets though he was traveling alone. When a curious co-passenger enquired as to why he was purchasing two tickets when he was traveling alone, he clarified that it was to avoid embarrassment before the ticket examiner in the event of one of the tickets being lost. The co-passenger further queried as to what would happen if both the tickets purchased by him were lost or misplaced and thereupon, the overcautious passenger confided that he was already having a monthly pass"!
You think this is a copy and paste mistake? What is this story about a cautious passenger in a report about a tax case? Well this is an extract from the mega order delivered by CESTAT recently in the now (in)famous Bharti Airtel case where the duty and penalties involved were over Rs. 400 Crores. For the last four years, the case was heard by several benches of the CESTAT. Finally, the present Bangalore bench of the Tribunal delivered recently an exhaustive judgement running into 96 pages.
The appellants imported telecom equipment with the related software along with backup etched into the hardware. The appellants also imported the software in CDs/ODs. The latest software could also be downloaded through Internet. If the software was already etched into the hardware and there was backup and it could be downloaded, why did they import the CDs/ODs (which were incidentally not opened for years!)? It is this situation which reminded the Tribunal about the over cautious passenger.
Other interesting quotes from the Tribunal's Order.
A cat may resemble a tiger in certain respects. The cat and the tiger may belong to the same family among animals. However, cat and tiger cannot be treated to be identical on all respects.
A computer with a printer performs all the functions of a typewriter. However, computer is much more than a mere typewriter.
Computers are excisable goods and the software meant for computers are also excisable goods. It is not as if every software is to be treated separately for the purpose of classification and valuation. It depends upon various factors like the nature of products and the purpose for which the software is to be used, whether the said software is marketable separately, whether the software is so essential to give the identity to the computer and without which the same becomes dysfunctional or whether the software is meant to enhance its utility.
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