Custom, Excise & Service Tax Tribunal
Microland Ltd vs Commissioner Of Customs on 23 September, 2016
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL SOUTH ZONAL BENCH CHENNAI Appeal Nos.C/531, 532/2005 [Arising out of Order-in-Appeal C.Cus.No.542 & 543/2005 dt. 19.8.2005 passed by the Commissioner of Customs (Appeals), Chennai] Microland Ltd. Appellant Versus Commissioner of Customs, Chennai Respondent
Appearance:
Shri R. Sridharan, Advocate For the Appellant Shri A. Cletus, ADC (AR) For the Respondent CORAM :
Honble Shri D.N. Panda, Judicial Member Hon'ble Shri Madhu Mohan Damodhar, Technical Member Date of hearing / decision : 23.09.2016 FINAL ORDER No.41645-41646/2016 Per D.N. Panda It is the submission on behalf of the of appellant that what was imported was computer software as per the description in the Bill of Entry, a sample of which is available at pages 59 & 60 of the appeal folder. Appellant says that the Notification No.11/97-Cus. dt. 1.3.97 grants exemption of Basic Customs Duty to computer software. The meaning of computer software is given in the Explanation under Sl.No.173 of the said notification reading as under :-
"Explanation. 'Computer software' means any representation of instructions, data, sound or image, including source code and object code, recorded in a machine readable form and capable of being manipulated or providing interactivity to a user, by means of an automatic data processing machine falling under heading No.84.71, but does not include software required for operation of any machine performing a specific function other than data processing and incorporating or working in conjunction with an automatic data processing machine."
2. Analysing the Explanation, appellant says that what that carries out the function enumerated therein serves the purpose of computer software. Even if Router is considered to be not computer, when that is made functional through use of software, it tantamounts that its purpose is to accommodate software for its function. Therefore, just because a Router was imported, that shall not deprive the appellant from claiming the benefit of the computer software imported simultaneously in the same consignment.
3. Going further, learned counsel says that Board by Circular No.7/98-Cus. dt. 10.2.98 stated that software for telecom, medical or the other applications is not eligible for exemption from duty. According to him, such prohibition not being provided by the notification, the circular has no significance in law. Accordingly, the notification benefit denied to the appellant calls for reversal.
4. On the other hand, Ld.D.R emphasizes on the breach of object of the circular stated above to submit that if the software has no character of computer software but used in telecom system that is not eligible to get notification benefit.
5. Heard both sides and perused the record.
6. On a bare perusal of the Explanation given under Sl.No.173 of the notification, we do not find any debarring provision incorporated in that notification to prohibit telecom, medical and other systems to be ineligible to get the exemption benefit when a software is imported to make the system functional. The circular itself appears to be contrary to the mandate of the notification. Therefore, appellant is entitled to the grant of notification that has not prohibited it to get the benefit thereof. Appeals are allowed only on this count without touching any other aspect which was not agitated before us. Both the appeals are accordingly allowed.
(Dictated and pronounced in open court)
(MADHU MOHAN DAMODHAR) (D.N.PANDA)
TECHNICAL MEMBER JUDICIAL MEMBER
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