2016 (4) TMI 438 - AT - Customs

Interpretation of explanation - Import of software separately along with hardware - Whether the software imported was Information Technology software in terms of explanation given in entry 285 read with CTH 85.24 in terms of Notification No. 17/2001-Cus. dated 01.03.2001 or not - Held that - having examined the scope of the explanation and utility of the above software in absence of any contrary evidence or authentic literature from the revenue to discard the claim of the appellant it can irresistibly be concluded that the software imported by the appellant was Information Technology software. - Decided in favour of appellant

Summary

Issues:
1. Interpretation of whether the imported software qualifies as "Information Technology" software under entry 285 read with CTH 85.24 in Notification No. 17/2001-Cus.

Analysis:
The appeal revolves around determining if the software imported by the appellant falls under the category of "Information Technology" software as defined in the notification. The appellant argues that the software, imported separately from hardware, meets the criteria outlined in the explanation provided in the notification. The software was used to manipulate and interact with the imported hardware, fulfilling the conditions set forth in the explanation. The appellant contends that the software should be considered "Information Technology" software, thus warranting duty exemption under the notification.

The Revenue, however, relies on a judgment by the Apex Court in a different case to argue that the definition of software is well-established. They assert that the appellant should not receive any exemption, even if the software falls under CTH 85.24, as per entry 285 of the notification. The Revenue's position is that the software in question does not meet the criteria established by the Apex Court's judgment, implying it does not qualify as "Information Technology" software.

Upon hearing both parties and reviewing the records and relevant legal precedents, the Tribunal finds that the dispute does not pertain to the classification of the software but rather to whether it qualifies as "Information Technology" software as per the notification's explanation. The Tribunal notes that the Commissioner (Appeals) exceeded the scope of the show cause notice by reclassifying the software, which was not the subject of dispute initially. The sole issue was to determine if the imported software aligns with the definition of "Information Technology" software to be eligible for the notification's benefits.

After evaluating the software's scope and functionality, and considering the lack of contrary evidence from the Revenue to refute the appellant's claim, the Tribunal concludes that the software indeed falls within the ambit of "Information Technology" software. As a result, the appeal is allowed in favor of the appellant, granting them the benefit of duty exemption under the notification.

In conclusion, the Tribunal's decision rests on the interpretation of the notification's explanation regarding "Information Technology" software and the software's actual utility in relation to the hardware it interacts with, ultimately leading to the allowance of the appeal.