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TMI Blog2000 (1) TMI 194X X X X Extracts X X X X X X X X Extracts X X X X ..... approximately in the present case is Rs. 60,000/- or Rs. 65,000/-. As against this, the cost of the computer software is roughly Rs. 67 lakhs. Therefore, it can be said that what is imported by the appellant is essentially a computer software. It is thus held that computer software imported by the appellant on a hard disk drive is assessable at the rate of 10% as per Heading 85.24 with the Exemption Notification dated 16th March 1995, because what was imported by the appellant was software on a hard disk and it was not hard disk in the garb of software. Appeal allowed. X X X X Extracts X X X X X X X X Extracts X X X X ..... torage device used with the computer system. The hard disk drive is also known as Hard Disk, Hard Drive, Fixed Disk Drive or Winchester Disk Drive. The hard disk drive is used to store data and programs permanently inside the computer. The information stored in the hard disk drive does not get erased when the power supply to the computer is switched off. This device is known as "Hard Disk Drive" because compared to the other common magnetic storage device, floppy disk, which uses flexible plastic like carrier for the magnetic recording medium; the hard disk drive uses rigid, hard aluminium or glass as the base for recording medium. x x x x Information is stored in the hard drive using the same magnetic recording method, which is used to store songs on a audio tape or movies on a video tape. The audio or video tape does not lose its content when the power supply given to the audio or video recorded is switched off, same way the hard drive also retains the information stored in it, even when the power supply to the hard drive is switched off." 5. H ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecorded tapes, magnetic tapes or other similar recorded phenomena. As per the literature supplied by the department, hard disk drive is used to store data and programs permanently inside the computer. The difference between hard disk drive and common magnetic storage device or floppy disk is the base for recording medium. It also provides faster access and larger storage capacity; its function is to store the data instructions, sound images etc. and it is like phonograph records. Floppy disk uses flexible plastic like carrier for magnetic recording medium. Information is stored in the hard disk drive using the same magnetic recording method which is used to store songs on an audio tape or movies on a video tape. Therefore, hard disk is a refined form of floppy and serves the same purpose of recording material in more efficient way. The moot difference between the hard disk and the software is that a hard disk is a hardware whereas software is a representation of any type of data and which can be stored in the hard disk. There is no dispute that floppy on which software is stored would be taxable under Tariff Heading 85.24. Instead of storing the software on the floppy if it is stor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of Interpretation mentioned in the First Schedule appended to the Customs Tariff Act which lay down general Rules for the interpretation and classification of goods for import tariff. Rules 2(b), 3 and 4 read as under :- "2(b) Any reference in a heading to a material or substance shall be taken to include a reference to mixtures or combinations of that material or substance with other materials or substances. Any reference to goods of a given material or substance shall be taken to include a reference to goods consisting wholly or partly of such material or substance. The classification of goods consisting of more than one material or substance shall be according to the principles of rule 3. 3. When the application of Rule 2(b) or for any other reason, goods are, prima facie¸ classifiable under two or more headings, classification shall be effected as follows : (a) The heading which provides the most specific description shall be preferred to headings providing a more general description. However, when two or more headings each refer to part only of the materials or substances contained in mixed or composite goods or to part only of the items in a set put up for ret ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tem; (b) It is connectable to the central processing unit either directly or through one or more other units; and (c) It is able to accept or deliver data in a form (codes or signals) which can be used by the system. 13. He referred to clauses (b) and (c) and contended that this hard disk drive can be used either directly or through one or more other units for processing the data and, therefore, it would be automatic data processing machine falling under Heading No. 84.71. This submission cannot be accepted for the consignment in question is essentially a computer software covered by specific Heading No. 85.24 which is for levying duty on records, tapes and other recorded media for sound or other similarly recorded phenomena. As mentioned in the Notification dated 16th March 1995, computer software is covered by Heading No. 85.24. The said notification also covers computer software imported in the form of printed books, pictures, manuscripts and typed scripts covered by Chapter 49. Computer software can be brought either on a floppy or magnetic tape or on a hard disk or in a printed form and hence, what is imported is software on a container which is a hard disk drive. The ..... 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