Customised software classification supports interim waiver of pre-deposit and stay of excise recovery pending appeal.

Software was examined for excise classification under Notification No. 6/2006-CE, which exempts customized software and taxes packaged software. On a prima facie view, the product was treated as not classifiable as packaged software, because the material indicated customized software rather than off-the-shelf mass-market software. The assessment was confined to interim relief, and the fuller questions on the nature of the software, mode of supply, implementation support, and final classification were left open for the appeal. Waiver of the balance pre-deposit and stay of recovery were granted pending final adjudication.

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Issues: Whether the appellant made out a prima facie case for waiver of pre-deposit and stay of recovery in respect of excise duty demanded on software on the basis that it was not packaged software.

Analysis: The software in question was examined in the light of Notification No. 6/2006-CE, which exempts customized software and taxes only packaged software, and the TRU clarification describing normal software as a mass-market product available off the shelf and specific software as tailored to customer requirements. On that understanding, the product was found, at the interim stage, not to be prima facie classifiable as packaged software. The assessment was expressly limited to pre-deposit, leaving open the fuller examination of evidence on the nature of the software, the mode of supply, implementation support, and related classification issues at the final hearing.

Conclusion: The appellant was held entitled to waiver of the balance pre-deposit and to stay against recovery during the pendency of the appeal.

Final Conclusion: Interim relief was granted on a prima facie assessment of classification, with the substantive tax liability left for determination in the appeal.

Ratio Decidendi: For purposes of interim relief, where the material indicates that the product is prima facie customized software rather than packaged software, waiver of pre-deposit and stay may be granted pending final adjudication.

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