2008 (3) TMI 87 - AT - Central Excise

Classification - case of the Revenue is that software is application software hence classifiable under Sub-heading 8524.90 as other computer software - software in question is used with the data processing machine to check and verify the operation of telecommunication software and there is no further classification of operational or application software as claimed by revenue, so it is classifiable u/h 8524.20 revenue appeal dismissed

Summary

Issues:
Classification of computer software under Central Excise Tariff Act - Sub-heading 8324.20 vs. Sub-heading 8524.90.

Analysis:
The appeal was filed by the Revenue against the order of the Commissioner (Appeals) where it was held that the computer software in question, manufactured and cleared by the respondents, is classifiable under Sub-heading 8324.20 of the Central Excise Tariff Act, 1985. The Revenue contended that the software should be classified under Sub-heading 8524.90 as other computer software used in telecommunication, arguing that software under Sub-heading 8524.20 is only operational software. The respondents argued that Heading 85.24 of the Tariff covers various recorded media, including computer software, and that the software in question is used with a data processing machine for telecommunication satellite operations, thus should be classified under 8524.20 as computer software.

The Tribunal analyzed the Central Excise Tariff Act and noted that Heading 85.24 pertains to records, tapes, and other recorded media for sound or similar phenomena, including computer software under Sub-heading 8524.20. The Tribunal highlighted that Sub-heading 8524.90 covers other recorded media for sound or similar phenomena, which includes magnetic tapes and discs. It was established that the software in question is utilized with a data processing machine for telecommunication satellite operations, and since there is no specific differentiation between operational and application software in the classification, the Tribunal found no error in the Commissioner's order and dismissed the appeal.

Therefore, based on the interpretation of the Central Excise Tariff Act and the specific usage of the software in question with a data processing machine for telecommunication operations, the Tribunal upheld the classification of the computer software under Sub-heading 8324.20 and rejected the Revenue's contention for classification under Sub-heading 8524.90. The decision was made considering the absence of distinct classification criteria for operational and application software in the relevant tariff provisions, leading to the dismissal of the appeal.