1. The Revenue has challenged the order of the Commissioner made on 31.3.2004 only to the limited extent to which the Commissioner has ordered that the value of a co-processor by its nature and use was not liable to be included in the value of the computer system. A direction has been given under the impugned order by the Commissioner to the jurisdictional Asstt. Commissioner to re-examine the record and identify the peripherals in the light of the discussion contained in the order and exclude them from the list of items which constitute the computer systems. The effect of the said direction read with the findings in paragraph 10 of the order in the context of co-processor holding that it was distinct from the main processor and that it performs additional functions or assists the main processor and that the most common type of co-processor is numeric or math co-processor, was that its value was not liable to be included by virtue of the nature of its use.
2. The learned Authorized Representative for the department taking us through the entire record and the impugned order, contended that the Commissioner has, by giving a contrary finding in the context of co-processor, flouted the order of the Tribunal remanding the matter, in paragraph 5 where of it was already concluded that co-processor as well as random access memory, "are definitely, considered as integral parts of the computer system". He also relied upon the decision of the Tribunal in the case of Sunray Computers (P) Ltd. v. CCE, Bangalore , in which it was held that, the numerical 3. Earlier, the Tribunal had remanded the matter on the ground that the Commissioner had not passed any speaking order. However, while doing so, in para 5 of that order, it was in terms held that, co-processor was an integral part of a computer system. Processor is a device that performs one or many functions, and is usually a central processing unit. A co-processor which is part of a computer system assisting the main processor in performing additional functions would ordinarily be a part of the computer system in which it is included. The learned Commissioner while observing that the most common type of co-processor was numeric or math coprocessor, has concluded, without any basis, that by its nature and use the value thereof was not liable to be included in the value of the computer system. When a co-processor is an integral part of the computer system, and synchronized within it with the main processor, it obviously would be a part of the computer system and indeed an essential part because of its numeric or math functions without which a computer system can hardly function efficiently. A Division Bench of this Tribunal has concluded this issue in the case of Sunray Computers (P) Ltd. (supra), while holding in paragraph 3 of the judgment that the numerical co-processor must be regarded an essential part of the computer. Therefore, there was no warrant for the Commissioner to direct the Asstt. Commissioner to exclude coprocessor from the list of items which constitute the computer system on the ground that its value was not liable to be included in the value of the computer system. The challenge of the Revenue is confined only to this aspect of the matter as is made clear before us by the ld. Authorized representative for the Department.
4. For the foregoing reasons, we set-aside the portion of the order of the Commissioner by which a direction has been given to the jurisdictional Asstt. Commissioner to exclude from the list of items which constitute the computer system, co-processor on the ground that its value was not includible in the value of the computer system.
5. The order of the Commissioner stands modified, as above, and this appeal is accordingly allowed.
(Dictated and pronounced in the open Court on the 6^th day of September, 2007)