Customs, Excise and Gold Tribunal - Calcutta
M/S. Usha Martin Telekom Limited vs Commissioner Of Customs, Calcutta on 20 February, 2001
Equivalent citations: 2001(138)ELT839(TRI-KOLKATA)
ORDER
Mrs. Archana Wadhwa
1. The appellant provides Cellular Telephone Service and for the said purposes, they had imported and installed Mobile Switching Centre (MSC). For controlling and regulating the functions and operations of MSC, there is a Co-ordination Processor (CP). CP is a computer handling the data base as well as configuration and co-ordination functions like storage and administration of ll programmes, interaction withe the users, manipulation and exchange of different data etc. as CP functions are programmable as per the requirements and desires of the user. The Software of CP is loadable/reloadable Software which can be changed any number of times depending upon the requirements and needs of the users. CP has got a magnetic tape drive like any other computer to retrieve the data or to download the programme or data onto its hard disc.
2. The appellant imported the Computer Software for expansion of MSC. The said Computer Software imported by the appellant was for telecom purpose. In as much as the Computer Software was exempted under Notification No.11/97-CUS dated 1.3.97, the bills of entry filed by the appellant were assessed by the Customs duty-free, and the same was allowed to be cleared by the appellant on 2.1.98. After the assessment of the said bill of entry and after clearance of the goods in question, the Notification No.11/97-CUS was amended on 11.2.98 by Notification No.3/98-CUS and by reason of the said amendment, Serial No. 173 of the earlier Notification No.173 of the earlier Notification No.11/97-CUS was substituted by a new entry. Accordingly, the appellant was served with a show cause notice under Section 28 of the Customs Act, 1962 demanding a differential duty of Rs.1,39,32,300.00 (Rupees one crore thirty-nine lakh thirty-two thousand three hundred) only one the alleged ground that the definition of Computer Software as given in Notification No.3/98-CUS dated 11.2.98, would be retrospectively applicable to the appellant's case and by applying the same, the Computer Software imported by the appellant for telecom purposes would not be entitled to the benefit of exemption. The said show cause notice was confirmed by the Commissioner vide his impugned Order.
3. Shri S.K. Bagaria, learned Advocate appeared for the appellant and Shri A.K. Chattopadhyay, learned J.D.R. for the Revenue.
4. It has been strongly argued before us that the Computer Software imported by the appellant for telecom purposes duly satisfied the conditions of Notification No.11/97-CUS dated 1.3.97, which was holding the filed at the relevant time and as such, the same would be entitled to the benefit of the said Notification. The subsequent amendment to the said Notification on 11.2.98 cannot be given any retrospective effect, in as much as the said Notification curtails the benefit of introduction certain restrictive condition or exclusions in the form of an Explanation attached to the Notification. The reasoning of the Commissioner that it is the definition of the Computer Software as appearing in Notification No.3/98-CUS dated 11.2.98 which has to be applied even in respect of he clearances made prior to the said date, is wholly erroneous. Reference in this regard, has been made to a number of decisions of the Hon'ble Supreme Court on various points. It has also been urged that in any case, the Computer Software imported by the appellant gets covered even by the definition of the same as appearing in amending Notification No.3/98-CUS and it is only by way of a circular issued by the Central Board of Excise and Customs that a Telecom Software has been kept out of the exemption benefits.
5. Revenue has also referred to the Commissioner's finding and supported the same.
6. After giving our careful consideration to the arguments advanced from both sides, we find that in similar set of facts and circumstances, West Zonal Bench at Mumbai had held that the benefit of Notification No. 11/97-CUS dated 1.3.97 is available to the Software imported by the appellant in that case, who was also a telephone service provider. In that case also, the Computer Software was imported prior to amendment to Notification No.11/97-CUS dated 1.3.97 by Notification No.3/98-CUS dated 11.2.98. The Tribunal, while considering the claim of the appellant, has observed as under:-
"6 .....This is made clearer by the fact that the notification was amended by Notification no.3/98. After the amendment software required for operation of any machine performing a specific function of data process by incorporating or working in conjunction with an automatic data processing machine is specifically excluded by the explanation. However, this explanation was not present when the software in question was imported. The software in question was entitled to exemption under notification."
With these observations, the Honourable Bench has allowed the appeal of the appellant in that case.
7. In as much as the facts involved in the present case are identical to the facts present in the case of BPL Mobile Communications Ltd. vs. Commissioner of Customs, ACC, Mumbai reported in 2000(40)RLT-249 (CEGAT), by following the ratio of the said decisions we set aside the impugned Order and allow the appeal with consequential reliefs to the appellant.