Computer software exemption under customs notification depends on technical evidence, not merely telecommunication use descriptions

Exemption under Notification No. 11/97-Cus. was confined to computer software, and eligibility depended on technical evidence showing the imported software's character and the working of the machine in which it would operate. A description of use for telecommunication purposes alone was insufficient to establish that the software fell within the notification. In the absence of technical literature or data showing use in a system containing an automatic data processing machine, the issue could not be conclusively determined on the existing record. The matter was therefore remanded for fresh adjudication after consideration of the technical material and machine details.

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Issues: Whether the benefit of Notification No. 11/97-Cus. was available to the imported software and, for deciding that question, whether the software could be treated as computer software on the available technical material.

Analysis: The exemption under the notification was confined to computer software. The earlier view that software used for operating a machine performing a specific function could also fall within the exemption was noted, but the record contained no technical literature or data to show whether the imported software was used in a system containing an automatic data processing machine. Mere use for telecommunication purposes was not enough to classify it as computer software. In the absence of technical evidence on the working of the machine in which the software was to be used, the issue could not be conclusively decided.

Conclusion: The matter was remanded to the adjudicating authority for fresh adjudication after considering the technical data and the working of the machines. The appeal succeeded by way of remand.

Final Conclusion: The exemption claim was not finally decided on merits and required reconsideration on the basis of technical evidence.

Ratio Decidendi: Eligibility to exemption for software depends on its established character as computer software on the basis of technical evidence, and a mere telecommunication use description is insufficient.

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