Customs exemption for software park imports survives training use, including commercial training, where circulars permit the activity.

Imported computers and peripherals used by a software technology park unit for software development and export remained eligible for customs exemption despite being used for training, including commercial training, within bonded premises. The exemption was linked to import for software development and export, and the unit had exported software far exceeding the value of the imported equipment. Board circulars clarified that training use did not bar the benefit, and departmental authorities were bound by those circulars. Denial of customs duty exemption was therefore unsustainable.

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Issues: Whether imported computers and peripherals were entitled to exemption under Notification No. 140/91-Customs dated 22.10.1991 when the software technology park unit also used them for training purposes, including commercial training.

Analysis: The exemption was intended for goods imported for software development and export. The unit had imported machinery for that purpose and had exported software far exceeding the value of the imported equipment. The Board's circulars clarified that use of the equipment for training, including commercial training within the bonded premises, would not object to the exemption. The departmental authorities were bound by those circulars and could not disregard them.

Conclusion: Use of the imported machinery for training did not defeat the exemption, and the denial of customs duty exemption was unsustainable.

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