Retrospective customs exemption amendment cannot defeat software exemption on import date under the original notification.

Software imported for knitting, weaving and designing was to be tested against Notification No. 11/97-Cus. as it stood on the date of import and filing of the Bills of Entry. The exemption then covered computer software, and the later exclusion introduced by Notification No. 3/98-Cus. could not be applied retrospectively. The explanation added on 11-2-98, which excluded software required for operation of machines performing specified functions other than data processing, was only an amendment and did not govern earlier imports. On that basis, computer-aided design and manufacturing software imported before the amendment remained exempt under the original notification.

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Issues: Whether software imported for knitting, weaving and designing was entitled to exemption under Notification No. 11/97-Cus. as in force on the date of import, and whether the exclusion introduced later by Notification No. 3/98-Cus. could be applied retrospectively.

Analysis: The exemption available under Serial No. 173 of Notification No. 11/97-Cus. had to be determined with reference to the notification as it stood on the date of import and filing of the Bills of Entry. At that time, the notification exempted computer software without the later exclusion inserted by Notification No. 3/98-Cus. The Explanation added on 11-2-98 excluded software required for operation of machines performing specific functions other than data processing, but that restriction was introduced only by amendment and could not be given retrospective effect. The imported software was treated as computer-aided design and manufacturing software, and the subsequent exclusion could not govern earlier imports.

Conclusion: The imported software remained covered by Notification No. 11/97-Cus. on the relevant dates, and the Revenue's denial of exemption was not sustainable.

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