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"9. ..In other words, when the software package is imported, it remains a packed software or canned software. Only after further modification, it acquires the characteristic of custom designed software. Alternatively, what is supplied to the customer is customized software, but what is imported is packaged software. "

The Ld. Counsel submitted that the judgment means that it does not matter whether the software is just modified from standard software or is virgin developed software, what really matters is whether at the time of import, the software was packaged software or customized software. He contended that in the present case, the software was customized in Germany as per the needs of BHEL, after due consultation with BHEL and NTPC, and hence at the time of import, the software was customized and hence as per the decision cited above, the benefit of the notification should be extended to them.

6.7.1 The Ld. Counsel has submitted that the imported software is customized software whereas the Ld. SDR maintained that the software was not a custom designed software, but was a standard or packaged software, which has been modified / adapted for BHEL so that it can work better in their environment.
6.7.2. The Ld. Counsel argued that the imported software is customized software, which is specifically made for each plant based on the specific parameters and design of each plant. The Ld. SDR countered this by pointing out that the standard software / its standard components or modules are installed in different power plants across the world. He relied on the following documents in support:

7.1. The description of the entry at Sl. No 27 of the said Notification reads thus:

Any Customized software (that is to say, any custom designed software, developed for a specific user or client), other than packaged software or canned software.
Explanation.- For the purposes of this entry, packaged software or canned software means a software developed to meet the needs of variety of users, and which is intended for sale or capable of being sold, off the shelf Thus, it is clear that only customized software merits exemption under the notification. The issue to be decided here is whether software needs to be developed from scratch or whether modification of pre existing software is sufficient enough to merit it being called customized software.
7.4.3. The second stage is obviously after the first i.e. when it is proved that the subject falls well within the ambit of the notification, then at that stage, full effect must be given to it.
7.4.4. On going through the Central Excise exemption notification No.6 / 2006, we find that the exemption is given only to customized software, which is further qualified by the clause that is to say custom designed software.
7.4.5. The Ld. SDR has rightly pointed out that though customized software may have a wide meaning in common parlance, even then, by virtue of the restrictive clause in the notification, the eligibility to the exemption is restricted to only custom designed software. This is further reinforced by the intent as decipherable from the comparable Service Tax law in force, which says that in the case of unbranded / customized software, the supplier develops the software. We also agree with the submissions of the Ld. SDR that when there is a clear cut meaning attributed to customized software in the notification itself, then the dictionary meaning or description as given in wikianswers.com cannot override the same.