Broad definition of information technology software supports customs exemption for imported CDs containing sound and image.

Imported CDs were treated as "information technology software" under Notification No. 21/2002-Cus because the notification defined that expression broadly to cover machine-readable representations of instructions, data, sound or image capable of manipulation by an automatic data processing machine. The presence of sound or image did not take the CDs outside the exemption, and the need for another software to obtain the final result did not change their character. On that basis, the customs exemption applied and the demand was unsustainable.

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Issues: Whether imported CDs were covered by the expression "information technology software" in Notification No. 21/2002-Cus dated 1-3-2002 and were therefore entitled to exemption from customs duty.

Analysis: The explanation to the notification defined "information technology software" broadly to include any representation of instructions, data, sound or image recorded in machine-readable form and capable of manipulation or interactivity by means of an automatic data processing machine. The imported CDs fell within that definition. The fact that the CDs contained sound and image did not exclude them from the scope of the exemption. The decision of the Supreme Court in Pentamedia Graphics supported the view that software remains software even if another software is required to obtain the final result.

Conclusion: The CDs were eligible to be treated as information technology software and the denial of exemption was unsustainable.

Final Conclusion: The customs demand was set aside and the appeal succeeded on the exemption issue.

Ratio Decidendi: Where a notification defines information technology software broadly in machine-readable form, goods answering that definition remain eligible for exemption notwithstanding that they contain sound or image or require another software for their final use.

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