2019 (2) TMI 1368 - AT - Customs

Import of software - Exemption from the customs duty, the additional customs duty and CVD - N/N. 20/2002(Cus) dt. 01/03/2002, No.20/2006(cus) dt. 01/03/2006 and No.6/2006CE dt. 01/03/2006 - Appellant imported certain telecommunication software through Air Cargo Complex, Thiruvananthapuram and declared the same as customized information technology software in CD falling under CTH 84 23 8020 and CETH 85 23 8020 - Held that - The Commissioner in the impugned order has given detailed reasons for holding that the software imported is not a customized software and the same fall in the category of canned software - Further, the Commissioner has considered all the materials during the investigation. The relevant findings of the Commissioner are that the importer subscribes to different reasons for shifting the import from Bangalore to Trivandrum Air Cargo Complex including expense on transportation from Bangalore to Palakkad and increase in freight charges by M/s. Air India. No proof was produced by the importer to substantiate it. Further the importer neither explained the reasons for the payment of appropriate duty at Bangalore Air Cargo Complex when these software were cleared through Air Cargo Complex, Bangalore nor about the payment of duty on import of software from First Communication, Taiwan and M/s. Tecom, Taiwan - the appellant has not been able to rebut the detailed findings of the Commissioner in the impugned order. There is no infirmity in the impugned order - appeal dismissed.

Summary

Issues:
Appeal against order confirming duty liability and imposing penalties under Customs Act for importing software declared as customized but considered canned by the authorities.

Analysis:
The appeals were filed against an order confirming duty liability and imposing penalties under the Customs Act. The Commissioner upheld a duty liability of ?14,94,049 and imposed penalties under Section 112(a) read with Section 114A. The software imported by the appellant was declared as customized but was deemed canned by the authorities. The appellant argued that the software was tailored based on individual client requirements. However, the Commissioner found that the software was not customized but fell under the category of canned software, citing specific reasons and precedents.

The appellant, engaged in manufacturing and trading of telecommunication equipment, imported telecommunication software through Thiruvananthapuram Air Cargo Complex. They claimed exemptions based on specific notifications. The Department disagreed, conducted an investigation, issued a show-cause notice, and confirmed the duty liability. The original authority imposed penalties on the appellant, the Company Secretary, and the Deputy General Manager. The appellant challenged these penalties in the appeals.

The appellant contended that the impugned order was legally unsustainable as it did not properly appreciate the facts and law. They argued that the software was customized to meet individual client requirements. On the other hand, the Department defended the order, stating that after a detailed investigation and considering technical literature, the software was found not to be customized but canned. The Department relied on specific legal decisions to support their stance.

After hearing both sides and examining the records, the Tribunal found that the Commissioner had provided detailed reasons for categorizing the imported software as canned, not customized. The Commissioner considered all materials during the investigation and cited relevant findings. The Tribunal upheld the Commissioner's order, noting that the appellant failed to rebut the detailed findings presented. Consequently, all three appeals were dismissed, affirming the duty liability and penalties imposed under the Customs Act.