Software licence classification under heading 4907 affirmed, securing nil duty benefit for paper licences

Paper licences that merely convey the right to use software already loaded on a server are classifiable as documents of title under heading 4907, not as software under heading 8471/8523. The cited circular and prior tribunal view support that classification, and the department had not disputed similar subsequent clearances under heading 4907. On that basis, the challenged order was unsustainable, and the appellant was entitled to nil duty benefit under the relevant customs notification.

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Issues: Whether paper licences conveying the right to use software loaded on a server were classifiable under heading 4907 and eligible for nil duty under the relevant customs notification, or whether they were liable to classification under heading 8471/8523.

Analysis: The import consisted only of paper licences, which were documents of title enabling use of software already loaded on the server. The circular relied upon by the appellant clarified that documents conveying the right to use software do not merit classification under the software heading and are classifiable under heading 4907. The same classification issue had also been accepted in the cited tribunal decision, and the department had not disputed similar subsequent clearances under heading 4907. On these facts, the order under challenge was not sustainable.

Conclusion: The goods were correctly classifiable under heading 4907, and the appellant was entitled to the benefit of the nil duty notification.

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