TMI Blog2008 (10) TMI 58X X X X Extracts X X X X X X X X Extracts X X X X ..... and M. Veeraiyan, Member (T) Smt. R. Bhagya Devi, SDR, for the Appellant. Smt. Elizabeth Seshadri, Advocate, for the Respondent. [Order per P.G. Chacko, Member (J)]. - The following issue stands referred to this Bench on the facts of the case: "Whether 'Explanation' added by Notification No. 3/98-Cus., dated 11-2-98 to the entry at Sl. No. 173 of the Table annexed to Notification No.11/97-Cus., dated 1-3-97 is clarificatory of the expression 'computer software' so as to have retrospective effect from 1-3-1997". The respondents had imported software from M/s. Nokia Telecommunications Ltd., Finland for the purpose of operating telecom equipments in India. They filed a Bill of Entry dated 6-2-1998 for clearance of the goods ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. (underlining added) The Assistant Commissioner of Customs, considering the above Explanation to be clarificatory, held that the software imported by the respondents was not computer software. Accordingly, the goods came to be assessed to duty on merits. In the appeal filed by the assessee against the decision of the original authority, the Commissioner of Customs (Appeals) held that the amendment to Notification No. 11/97-Cus. was not clarificatory and did not impose any additional burden ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 11/97-Cus. to set at rest any doubt as to what constituted 'computer software'. The learned SDR also referred to Note 5(E) to Chapter 84 of the Customs Tariff Schedule and submitted that a "machine performing a specific function other than data processing and incorporating or working in conjunction with an automatic data processing machine" was, by virtue of the Chapter Note, not classifiable under Heading 84.71 as automatic data processing machine [computer] and, therefore, any software required for the operation of such machine was not to be treated as 'computer software. It was argued that this 'pre-existing' position was only clarified by the Explanation added to Sl. No. 173 of Notification No. 11/97-Cus. Thus it argued that the teleco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ue that since the imported software was used for the operation of equipments/machines having a specific function (telecommunication) other than data processing, it should not be held to be computer software inasmuch as the Explanation to Sl. No. 173 of Notification No. 11/97-Cus. excluded from the scope of 'computer software', "any machine performing a specific function other than data processing and incorporating or working in conjunction with an automatic data processing machine". It has been submitted that, as per Chapter Note 5(E) in the Customs Tariff Schedule, any machine performing a specific function other than data processing and incorporating or working in conjunction with an automatic data processing machine is not classifiable u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e ambit of 'computer software' under Sl. No. 173 of Notification No. 11/97-Cus., with the result that the respondents were entitled to claim exemption from payment of duty on the software imported by them. 5. The Explanation, which was added to the description of goods in Col. No. 3 against Sl. No. 173 of the Table annexed to Notification No. 11/97-Cus. had the effect of imparting a technical meaning to the expression 'computer software', according to which a 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 would stay outside the ambit of 'computer software'. Such a restriction prejudicial to im ..... X X X X Extracts X X X X X X X X Extracts X X X X
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