TMI Blog2001 (8) TMI 1089X X X X Extracts X X X X X X X X Extracts X X X X ..... for POS Transactions valued at Pound Sterling 1,09,602 and Pound Sterling 52,143 respectively. These software consignments were declared in two Bills of Entry No. 17019, dated 14-3-98 and 22946, dated 4-4-1998. They were exported by M/s. Interlink as part Sparrow Hawk systems which is installed at Appellant Bank For Intercom Project Nations Operation . The appellants had before importing the items written to Additional Commissioner of Customs by their letter dated 26-3-98 and 3-4-98 claiming exemption from customs duty and had filed a detailed technical write up justifying the claim in terms of Sl. No. 173 of Notification No. 11/97 which grants exemption to Computer Software . The original authority initially at the time of passing the Bill of Entry did not consider the imported items to be computer software and held it to be software other than computer which is required for operation of ATM machine for performing a specific function other than data processing. They were aggrieved with the said order of assessment of the AC. Hence, they filed an appeal before the Commissioner (Appeals) who by his adjudication order dated 14-12-98 confirmed the order-in-original dated 4-7-98 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an automatic data processing machine. The findings recorded by him is reproduced herein below :- I have carefully gone through the records of the case and the submissions made in the appeal. The CEGAT in its order had observed that the simple issue involved in the appeal is whether the two softwares namely Sparrow/Sparrow POS and Hawk imported by the appellants could be considered as necessary to operate the computer system on which they reside or they would be in the nature of applications software relating to the business activities of the appellants. The lower authority in his order has discussed at length the manner in which the software imported is put to use and the appellant also concedes that the lower authority has fully appreciated the technical aspects of the software. In other words, there is no dispute with regard to the observations of the lower authority as to how the software imported is used by the importer. As seen from the technical write-up and also, as confirmed by the order of the lower authority, the Sparrow/Sparrow POS/Hawk Softwares are applications software which are used by the importer for banking operations; the function of the Sparrow being to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ware used for operation of machines performing specific functions along with automatic data processing machines. The expert opinion (from Professor of Computer Science and Engineering, IIT, Madras) cited in this regard by the appellant which they state supports their view, in fact, confirms that Sparrow/Sparrow POS handles the formatted output from Hawk and has a generalised business application and Hawk handles the data processing relating to banking transactions. This technical opinion does not, in any way, support the view that the software imported falls outside the exclusion clause in the Notification. In fact, it confirms that the software is required for banking applications and also works in conjunction with the data processing machine. In the light of the above, I find no infirmity in the order of the lower authority denying the benefit of the exemption under Notfn. 11/97. 4. This order was appealed by the appellants with regard to rejection of benefit of customs notification referred to supra before the Commissioner of Customs (Appeals), Chennai who by her order-in-original No. C. Cus. 459/2000 dated 27-6-2000 upheld the Dy. Commissioner s order denying the benefit o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le for exemption from duty. The Board s circular clarifies that software for other application is not eligible for exemption from duty. Not only software required for operation of any machine but also application software for medical, telecom and other application stand excluded from the purview of the notification. In view of this position, the computer software in question being a banking application software falls out of the ambit of the explanation under S. No. 173 of Notfn. 11/97-Cus., and is eligible for levy of customs duty. Goods have correctly been classified under 8524 and duty charged @ 40% + 5%. Coming to the Central Excise Tariff, the classification of the goods will again be 8524. However, I find that a separte sub-classification exists for computer software. This sub-classification 8524.20 is for computer software for any media. There is no restriction as to the eligibility for classification under this sub-heading other than the fact that the goods are computer software. In this case, the goods are computer software. In terms of Notification No. 11/97, the CVD as applicable will have to be applied. Even in the absence of any notification, the goods would have been ..... X X X X Extracts X X X X X X X X Extracts X X X X
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