Per Shri V.P. Gulati:

The delay in filing the supplementary appeals, as per the practice and procedure, is condoned.

2. These appeals involve a common issue and are therefore, taken up together for disposal. Under the impugned orders, the learned lower appellate authority has held that the value of extra disc drive supplied with the computer system are required to be taken into reckoning for arriving at the assessable value and also that the amount relatable to the fright and insurance on production of evidence in this regard are required to be abated from the sale price for assessment purposes.

3. The revenue is aggrieved against this finding of the lower appellate authority and in the grounds of appeal, the following has been urged :

1. The Collector of Central Excise (Appeals) Madras has come to a wrong conclusion by allowing extra peripherals which cannot be used in the computers system at any point of time, as spares. The contracts entered into between the respondents and buyers are for the supply of hardware and software. Hence, the value for the purpose of assessment has to be taken for the whole contracted price in its entirity. Further disc drive/printed circuits are essential parts of computers, without which, the computers is incomplete. Thus it is definitely a part of computer. What is a part and what is an accessory has been clearly brought out by Hon'ble Supreme Court of India in case of International Tractors. It is further made crystal clear in the decision of CEGAT, Special Bench 'A'. New Delhi in the case of M/s. Sunray Computers Private Limited, that hardware, software and peripherals together make a workable computer and that all these are therefore, a part and parcel of the computers that if there is a single contract for the supply of computer including software, the total value of the computer including that of the software, would have to be assessed to duty, irrespective of the fact whether the software part is supplied alongwith the hardware or in a separate lot and irrespective of the fact whether a single invoice is made for both hardware and software or a separate invoice is made for the software. As regards, freight and insurance in transit, since it was not claimed as deduction in price list it is not admissible as deduction at a later date. The respondents should have claimed deduction on account of freight and transit insurance while filing the price list.

2. The cost of peripherals and parts whether bought out or otherwise in excess of one number supplied by the assessee alongwith the computer in compliance with commitment/agreement is includible in the assessable value as laid down in the case of Collector of Central Excise Vs. M/s. Sunray Computers Private Limited (Order No. 851/87-A dated 17.12.87) wherein it is held that is there is a single contract for the supply of a computer, including software, the total value of the computer including that of software would have to be assessed to duty irrespective of the fact whether the software parts is supplied alongwith the hardware or in a separate lot.

4. Shri V. Thyagaraj, the learned SDR for the department reiterated the grounds of appeal. He has pleaded that the extra disc drive was included in the contract for supply of computer and therefore when the whole system has been contracted for & the extra disc drive had been ordered, the value of extra disc drive should also therefore form part of the assessable value. In regard to the freight and insurance he has pleaded that the same may be allowed abatement only if it could be shown that in the contract for supply, element of freight and insurance was included in the sale price. He has pleaded that there is nothing in the order of the lower appellate authority to show that this was so. His plea is that without reference to the contract direction for abatement subject to production of evidence of expenditure incurred has been ordered.

5. Shri C. Sridhar, the learned Counsel for the respondents has