Computer software exemption for telecom-related imports upheld under the notification's ordinary meaning and functional classification approach.

Imported software on tapes, cartridges or CD-ROMs used for telecom-related functions qualified for exemption under Notification No. 11/97-Cus because the term "computer software" was to be read in its ordinary sense, not confined narrowly to software for automatic data processing machines under heading 84.71. Note 5(E) to Chapter 84 supported functional classification of the machine, but did not strip an incorporated data processing machine of its character as a computer. The later amendment excluding such software confirmed that the exclusion was not part of the notification at the time of import, so denial of the exemption was incorrect.

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Issues: Whether imported software on tapes, cartridges, or CD-ROMs used for telecom-related functions was eligible for exemption under Notification No. 11/97-Cus dated 1-3-1997.

Analysis: The exemption was confined to computer software, and the attempted restriction of "computer" to automatic data processing machines falling under heading 84.71 was found too narrow. The term had to be understood in its ordinary and general sense, and software used by computers generally could not be excluded merely because the computer was incorporated in or worked with a machine performing a special function. Note 5(E) to Chapter 84 supported classification of the machine by its function, but did not deny the character of the incorporated data processing machine as a computer. The later amendment excluding such software also showed that the exclusion was not part of the notification when the goods were imported.

Conclusion: The imported software qualified for the exemption, and the denial of benefit was incorrect.

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