Computer software exemption upheld where imported voice mail software operated with an ADP machine and later amendment had no retrospective effect.

Imported voice mail card and software were treated as computer software used with an automatic data processing machine, because they performed data conversion and processing functions in conjunction with the computer. A distinction based only on the software's telecom application was rejected. The amendment introduced by Notification No. 3/98-Cus. was held to operate only from its effective date and could not be applied to bills of entry filed earlier. On that basis, the imports fell within the exempted category under Notification No. 11/97-Cus., and the exemption denial and duty demand were set aside.

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Issues: Whether the imported voice mail card and software were classifiable as computer software entitled to exemption under Notification No. 11/97-Cus., and whether the amendment introduced by Notification No. 3/98-Cus. excluded the benefit for the imports in question.

Analysis: The imported software was used with an automatic data processing machine and performed data conversion and processing functions in conjunction with the computer. The distinction drawn by the lower authorities between telecom software and computer software, based only on the specific application of the software, was not accepted. The amendment introducing a more specific explanation to the notification was held to operate from its effective date and could not govern imports covered by bills of entry filed earlier. On the facts, the software was held to fall within the exempted category.

Conclusion: The benefit of Notification No. 11/97-Cus. was available to the imports, and the denial of exemption and the duty demand were set aside.

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