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Issues: Interpretation of the term "Information Technology Software" under Notification No. 20/99-Cus for duty exemption.
In this case, the appeal was made against the findings of the Commissioner (Appeals) regarding the nature of goods imported. The goods were described as containing positional information transferred onto objects using software known as "soft image." The Commissioner (Appeals) held that the goods did not qualify for duty exemption under Sl. No. 231 of Notification 20/99-Cus as they were not capable of manipulation and did not provide interactivity to the user. The issue revolved around interpreting the explanation under Sl. No. 231 in the notification, which defines "Information Technology Software" as any representation of instructions, data, sound, or image recorded in a machine-readable form. The Tribunal compared the explanation under Notification No. 20/99 with the earlier Notification No. 23/98 to understand the coverage of the term "Information Technology Software." It was noted that a clause excluding software required for operation of machines performing specific functions other than data processing was removed in the subsequent notification. The Tribunal concluded that any data capable of being manipulated by an automatic data processing machine would be covered under the term "Information Technology Software" in Notification No. 20/99. Therefore, the goods imported, which were data recorded on tapes, were deemed eligible for duty exemption under the notification. Based on the analysis, the Tribunal allowed the appeal, disagreeing with the Commissioner (Appeals) and holding that the goods qualified for the benefit of duty exemption under Notification No. 20/99-Cus. The Tribunal emphasized the expanded scope of software eligible for duty-free import under the amended notification and rejected the restrictive interpretation applied by the Commissioner (Appeals) based on the earlier notification.
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