2007 (5) TMI 62 - AT - Customs

Confiscation and penalty - Alleged that consignment of CD ROMS imported by the appellant is not entitle for exemption in all and accordingly penalty were imposed on him - Held that allegation was not correct and allow exemption in all cases

Summary

Issues:
Imported CD ROMS eligibility for Customs Duty exemption under Notification No. 11/97-CUS; Confiscation and penalties imposed by Customs Authorities; Interpretation of 'Computer Software' for exemption; Justification of penalties imposed.

Analysis:
1. The appellant imported CD ROMS seeking exemption under Notification No. 11/97-CUS for "Computer Software". Customs Authorities doubted eligibility, issued show cause notice, and proposed confiscation for mis-declaration.

2. The Commissioner adjudicated that certain CD ROMS did not qualify for exemption, confiscated items, and imposed penalties on the importing company and its CMD. Appeals were filed challenging confiscation and penalties.

3. The importer contended the Commissioner's finding was erroneous and self-contradictory, citing precedents and CBEC Circular. They argued that the titles qualified as computer software for exemption, emphasizing interactivity criteria.

4. Circular 7/98 clarified the scope of 'Computer Software', including interactive criteria. Precedents and expert opinions supported the CD ROMS' classification as software eligible for exemption.

5. Section 111(m) of the Customs Act allows confiscation for misdeclaration. As the CD ROMS were correctly declared and eligible for exemption, confiscation was unjustified. Penalties were not warranted in this case.

6. The Tribunal allowed the appeals, finding the CD ROMS qualified as computer software for exemption. The revenue's appeal for penalty enhancement was rejected due to penalties not being justified. All appeals were disposed of accordingly.

This comprehensive analysis highlights the issues of CD ROMS exemption, confiscation, penalty imposition, and the interpretation of 'Computer Software' for exemption under Notification No. 11/97-CUS, culminating in the Tribunal's decision favoring the importer and rejecting the revenue's appeal for penalty enhancement.