Customs, Excise and Gold Tribunal - Delhi
Collector Of Customs vs Systems Data And Control (P) Ltd. on 14 September, 1992
Equivalent citations: 1992(63)ELT275(TRI-DEL)
ORDER Jyoti Balasundaram, Member (J)
1. This appeal by the Revenue arises out of the order in appeal of the Collector of Customs (Appeals), Bombay extending the benefit of Project Import to "Wang Vs-80 Computer System imported by the respondents herein. The Assistant Collector had rejected the application for registration of contract under Project Imports (Registration of Contract) Regulations, 1965 on the grounds inter alia that the proposed activity i.e. computer software development amounts to "specialist support services" which is not a manufacturing activity falling within the scope of industrial plant figuring in Heading 84.66 of the Customs Tariff Act, 1975. The Collector (Appeals) set aside the order of the adjudicating authority holding that the scheme of concessional assessment to duty under Heading 84.66 will cover service industries also. Hence this appeal.
2. We have heard Shri M.K. Jain, learned SDR and Shri C.V. Francis, learned Advocate assisted by Shri B.M. Rao, learned Advocate.
3. During the period from 1972 to 1982, Shri Ashok Sareen, Managing Director of the Respondent company was a Non-Resident Indian living in the United States of America. The Government of India extended certain facilities for Indians returning home from abroad for permanent settlement and, he, therefore, decided to return to India permanently in 1982. In 1980, Ministry of Industry, Government of India issued a press note to the effect that "in view of the sophisticated and specialised type of operations involved in software servicing and data processing, it has been decided to recognise this as an industrial activity". Mr. Sareen had planned to set up an industrial unit for the manufacture of computer software and approached the Department of Electronics which is the sponsoring authority, for a No Objection Certificate and scheme approval for recommending his case to the CCIE, New Delhi for issue of a licence for import of a computer system under Project Import. The Department of Electronics communicated its clearance for the import scheme vide letter dated 27-1-1982. On the strength of the recommendation of the Department of Electronics, the CCIE issued a import licence dated 14-5-1982 for the import of Wang Computer System and the licence also contained an endorsement "Project Import for assessment under Heading 84.66 of Section XVI of the CTA 1975". Subsequently, an order for the purchase of the computer system was placed with M/s. Wang Laboratories, USA through their Indian Agents and the goods arrived in India in April 1984. The respondents applied for registration of contract as project import on 20-1 -1984 along with the import licence, order confirmation and letter dated 30-1-1984 from the Department of Electronics to the appellants regarding provisional registration which letter is reproduced below:
"I am directed to invite a reference to this Department's letter No. 17(8)/81-Comp. dated 27-01-1982 communicating the clearance of the Department of Electronics for the import of a computer by your organisation under the software export scheme. It was stated therein that the party shall register their unit with the DOE before effecting the import. I am directed to refer to your letter requesting for issue of registration certificate and to state that this letter may be deemed as indicating your provisional registration with the DOE for the purpose of its validity for customs clearance for the computer equipment. You should submit to the Department of Electronics progress report regarding the progress made by you in the software export once in six months as already stipulated and make available your records for verification by the DOE as and when desired. The final registration will be done after the necessary formalities are observed and a decision arrived in the DOE regarding the administrative procedure to be implemented for issue of the final registration letter.
The receipt of this letter may please be acknowledged."
4. The learned SDR contends that the development of computer software does not constitute an industrial plant as the activity viz. compilation of data on Floppies does not amount to manufacture or production within the meaning of Regulation 3(3)(b) of the Project Import (Registration of Contract) Regulations, 1965. His objection does not held good in view of the earlier decisions of the Tribunal in the case of Saraswati Stores v. Collector of Central Excise, Madras 1985 (22) E.L.T. 68 (Tri.) which in turn follows the Madras Court decision in the Das Colour Labs case. In a recent decision in the case of DPS India P Ltd. v. Collector of Central Excise, Calcutta -Order No. C/100/92-B2, dated 4-8-1992, reported in 1992 (62) E.L.T. 837 (Tri.), the Tribunal has followed its earlier decision in the case of Saraswati Stores, holding that the service industries are not excluded from the scope and coverage of Project Import.
5. Following the ratio of the earlier orders we uphold the impugned order and reject and appeal of the Department.