2002 (5) TMI 719 - AT - Customs

Software for knitting, weaving and designing imported for creating designs for students of National Institute of Fashion Technology

Summary

Issues:
1. Whether software imported by M/s. Magnum Solutions Pvt. Ltd. is eligible for duty exemption under Notification No. 11/97-Cus.

Analysis:
1. The Revenue contended that the software imported is not eligible for exemption as it is required for the operation of a machine working in conjunction with an automatic data processing machine. The Assistant Commissioner denied the benefit based on this ground. However, the Commissioner (Appeals) allowed the appeal citing a previous decision and the fact that the software was imported before the amendment of the notification. The Revenue argued that the exemption only covers computer software for automatic data processing machines.

2. The Respondent's advocate argued that the eligibility should be determined based on the notification as it existed when the Bill of Entry was filed. Before the amendment, computer software was fully exempted without any exclusions. The software imported was for designing purposes and not for operating manufacturing machines. The advocate presented evidence, including a certificate and clarification from the Department of Electronics, to support the claim that the software qualifies as computer software.

3. The Tribunal noted that the notification did not specify any conditions for exempted computer software at the time of import. The Explanation excluding software for specific machine operations was added later and cannot be applied retrospectively. Previous tribunal decisions supported this view, emphasizing that amendments are effective from the date specified and cannot be applied to imports made before that date. The Tribunal rejected the Revenue's appeal, stating that the software in question is entitled to the benefit of the notification.

4. In conclusion, the Tribunal found that the software imported by M/s. Magnum Solutions Pvt. Ltd. is eligible for duty exemption under Notification No. 11/97-Cus. The retrospective application of the Explanation excluding certain software requirements was deemed inappropriate, and the appeal filed by the Revenue was rejected.