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(4.3) It is submitted that assailing the appellate order on the issue of considering the consideration for software as royalty, the appellant contends for the position that such consideration paid by the appellant for the imported software cannot be considered as royalty. The appellant has acknowledged the position that internationally as well as in India, software, known in legal parlance as 'computer program' is covered under the broad category of 'literary, artistic or scientific work' which is copyrightable and that the copyright laws of different countries do recognize a computer programme to be subject-matter of copyright. However, it is urged that 'royalty' in respect of the subject-matter of copyright can only relate, to such payments for the use i.e., exploitation of the copyright of such literary/artistic or scientific work and that in order to be classified as royalty, the right of the person in possession of the subject-matter of a copyright should be to utilize such copyright in the manner which are otherwise protected by the respective copyright law in favour of the owner of the copyright in that the acquisition of a product, wherein the subject-matter of copyright is embedded without right to exploit the copyright does not entail use or right to use the copyright of such literary/artistic/scientific i.e., copyrighted work. On such premise, it is claimed that the consideration paid by the appellant towards the import of software does not partake the character of royalty so as to apply the related provisions of the IT Act. The appellant has also strongly relied upon the recent Supreme Court decision in the case of Tata Consultancy Services v. State of Andhra Pradesh (supra) (4.4) The plea so put forth by the appellant is patently untenable and unsustainable in law.

(i) Original literary dramatic, musical and artistic works

(ii) Cinematograph films, sound recordings.

It is significant to note that as per the present Copyright Act, 1957, the scope of the literary work would include 'computer programs, tables and compilation including computer databases'. As such, the Copyright Act, 1957, brings computer programs within the definition of a literary work and, therefore, the said Act provides copyright protection as available to literary work. (Section 14 of the Copyright Act which defines the expressions 'copyright' and 'computer program' are extracted in pp. 15 and 16 of the paper book filed by the standing counsel for the Revenue).