Computer software classification under excise law follows common parlance, securing exemption for control-system software.

Software developed and supplied for process control systems, distributed control systems and programmable logic controllers was treated as computer software for excise classification and exemption purposes. The Tribunal applied common parlance and trade parlance, noting that software and computer software were understood as synonymous in the relevant market and that no statutory distinction existed in the excise tariff for the period in question. It also declined to apply a definition drawn from a customs notification relied on by the Revenue, since it concerned a different context and period. The assessee's classification was accepted and exemption under the notification was upheld.

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Issues: Whether the software developed and supplied for process control systems, distributed control systems and programmable logic controllers was classifiable as computer software and eligible for exemption under Notification No. 48/94-C.E. dated 01.03.1994.

Analysis: The dispute turned on whether application software used exclusively for controlling industrial systems could be treated as computer software. The Tribunal applied the common parlance and trade parlance understanding of software, noting that the terms software and computer software were not separately defined in any authoritative source and were understood as synonymous by computer professionals and those dealing in computers. The Tribunal also followed its earlier decisions holding that the excise tariff did not draw a distinction between software and computer software for the relevant period, and declined to import the definition from a customs notification relied upon by the Revenue for a different context and period.

Conclusion: The software was held to be computer software and entitled to the exemption; the Revenue's appeal failed.

Final Conclusion: The classification adopted by the assessee was accepted and the exemption under the relevant notification was upheld, leaving no ground to interfere with the order in favour of the respondent.

Ratio Decidendi: In the absence of a statutory distinction, software used for control systems may be treated as computer software in common parlance for classification and exemption purposes, and a definition from a different statute or period cannot govern the excise classification dispute.

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