Customized software exemption depends on import-time character; standard modifiable software remains packaged software and is not exempt.

Imported software qualified for exemption from countervailing duty only if it was customized software developed for a specific user or client. Standard software packages capable of off-the-shelf use, even if they later require site-specific modification, remained packaged or canned software and fell outside the exemption. The imported software was held to be a standard, modifiable package, not customized software at the time of import, so it did not satisfy the exemption entry under the notification.

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Issues: Whether the imported software qualified as customized software eligible for exemption from countervailing duty under Serial No. 27 of Notification No. 6/06-Central Excise, or was packaged or canned software outside the exemption.

Analysis: The exemption entry covered only customized software, meaning customs designed software developed for a specific user or client, and expressly excluded packaged or canned software developed for a variety of users and capable of off-the-shelf sale. The imported software consisted of standard packages, required further modification at the customer's site before use, and was capable of being used by different users after suitable modifications. On that basis, the software in the form imported did not satisfy the definition of customized software, though the final product supplied after site-specific modification could be customized.

Conclusion: The imported software was packaged or canned software and not customized software; the exemption was rightly denied.

Final Conclusion: The appeal failed because the imported software did not fall within the exemption for customized software under the notification.

Ratio Decidendi: Software imported in standard, modifiable package form remains packaged or canned software for exemption purposes unless it is developed as customized software for a specific user or client at the time of import.

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