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There is no reverse engineering or modification right, nor the right to make copies/derivatives of the products. The source code is not shared, and what is transferred is the object code. Surely, there is no right to sell the same or make the copies thereof for licensing/sub-licensing. Similarly, the sale of 'EB Auto Care with EB Tresos Suite' to TCSL, again, only entitles the licencee non-exclusive user rights in the said software products, i.e., for its internal business purposes, with no right to commercially exploit the same. The ld. counsel for the assessee, Sh. Sparsh Bhargava, Advocate, was during hearing specifically asked by the Bench to explain the working of the assessee's software by its customers, viz. RBI. The assessee, per its written submissions dated 22.02.2018, explained EB Guide to be an end-to-end java based Human Man Interface (HMI) development platform, which helps customers in developing and testing HMIs, providing them a tool to Elektrobit Automotive v. Dy. DIT develop, design and test HMIs and deploy them onto target devices/hardware. That is, provides capabilities to develop user interface of all modalities, i.e., voice, touch and graphical interface. Instead of developing with detailed codes, prototyping facility allows multiple persons to simulate/design and develop HMI in parts at the same time, viz., as for example developing user interface work flow mapping and providing 3D visualization (which is a rapid prototyping technique). In other words, the software enables the user to design/simulate, prototype and deploy. HMI model can then be used by the customers by integrating it in its final product. Example was given to us of navigation system being now-a-days increasingly found in cars, which include graphics as well. The customer, it was explained, has no right to use the EB Guide Software in its own products, though can be used as a tool for developing HMI or HMI based product, i.e., licensed products, by its customers. It is similar to preparing a 'word document' using the commonly used software 'Microsoft Word'; the word document belongs to the user, while the copyright in Microsoft Word vests in Microsoft Corporation. Likewise, the HMI model developed by RBI belongs to it, while the copyright in EB Guide Studio belongs to the assessee.

The Revenue's case is that the development license is a full-blown agreement, allowing the user to internally develop, configure and adapt the software, so that the same can be used in the products manufactured which may be sold or licensed ('the licensed product') by it. Sub-licensing right allows the user to further sub-license the right to reproduce and distribute the licensed product to third parties. The restriction on the reverse engineering is subject to the rights granted under the license, viz. for copying, integration and compilation of the software into licensed products. The user is further obliged to furnish a monthly statement of all the licensed products supplied by the user to its' customers, and is to pay fee and royalty on the basis of the invoice raised by the assessee.

93. The licensee has been prohibited from copying, decompiling, de-assembling, or reverse engineering the software without the written consent of Infrasoft. The licence agreement between the assessee company and its customers stipulates that all copyrights and intellectual property rights in the software and copies made by the licensee were owned by Infrasoft and only Infrasoft has the power to grant licence rights for use of the software. The licence agreement stipulates that upon termination of the agreement for any reason, the licencee shall return the software including supporting information and licence authorization device to Infrasoft.

3.7 The assessee argument of the computer software being not a copyright is negated by its' own case of EB Guide Studio being an off-the-self software, and its supply being one of a copyrighted article. The several decisions relied upon by either side, i.e., for and against the license fee being, in the facts of a case, royalty (or not), are again largely qua computer software. Further, all the authorities, as the decisions by the Hon'ble High Courts; the OECD commentaries referred to therein, or by the tribunal, regard computer software as a copyright of literary/scientific work. We do not wish to enter into the controversy as to whether the same could be regarded as a literary work, as stated in some decisions (including Infrasoft Ltd. (supra)), or as scientific work. Again, in-as-much as we have followed the law as explained by the Hon'ble jurisdictional High Court in Infrasoft Ltd. (supra), binding on us, we do not consider it necessary to consider the several other Elektrobit Automotive v. Dy. DIT decisions cited before us (without going into their specific facts); the matter, as afore-stated, given the law as explained, being principally factual. We may though, if only to demonstrate our consideration of their facts, as well as that a difference on facts obtains, draw a comparison with reference to the decision in Infrasoft Ltd. (supra), principally relied upon before us. Clause 4.1.2 (of the Agreement) grants the right to execute and use the deliverables for the purpose of internally developing, configuring and adapting the licensed product. A deliverable signifies customization of a standard software, so that the IPR in the former implies that in the latter. The agreement further allows the right to modify, reverse engineer or decompile to create derivative works of any of them (clause 4.5). Even if, as contended, there is a restriction on reverse engineering - being allowed on a case to case basis - the licensor being certainly entitled to know the purpose for which its licensed software, and the information, viz. object codes, being shared, is to be used, it is of little consequence. This is all the rights necessary to develop the HMI have been or are to be allowed. Why, for all we know, reverse engineering may not be required for the same. If anything, it gets clarified from the said clause that derivative works are in contemplation on the basis of the development license. It is in fact upon considering all these aspects that we have - in the preceding part of this order, found the licensed product/s (HMI/s) are developed only on the basis/ edifice of the software licensed, and is thus a derived program, on the supply of which therefore EB keeps tab. The sale/license (or sub-license) of the licensed product by the customer is only a commercial exploitation of the assessee's software. These rights do not obtain in the case of Infrasoft Ltd. (supra), in which case the Hon'ble Court found the rights granted to be limited to those necessary for operating the program. Why, as afore-noted, the parties have in the instant case themselves regarded the consideration (license fee) as royalty, implying a grant of right to use the Intellectual Property Rights (IPRs) embedded in the software Elektrobit Automotive v. Dy. DIT inasmuch as it gets transmitted/embodied in the licensed products, with the user (RBI) being invoiced on the basis of the licensed products supplied. The decision in Infrasoft Ltd. (supra), rather, on facts, supports the case of the Revenue.