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of <h1>Tribunal decisions on appeal: Tullow India Operations Ltd. remanded, ONGC Ltd. partially allowed, software exemptions denied.</h1> The Tribunal allowed the appeal of Tullow India Operations Ltd., remanding it for reconsideration of certificates and exemption eligibility. The appeal of ... Data Cartridges - Customs exemption Issues Involved:1. Definition and classification of 'IT Software' under Entry 231 of Notification 20 of 1999.2. Eligibility for exemption from customs duty for imported data cartridges.3. Interpretation of 'source code' and 'object code' in the context of software.4. Requirement and timing of producing certificates for exemption under Entry 184 of Notification 20/99.5. Imposition of penalties on ONGC Ltd. and Tullow India Operations Ltd.Detailed Analysis:1. Definition and Classification of 'IT Software':The principal question revolves around whether the imported data cartridges qualify as 'IT Software' under Entry 231 of Notification 20 of 1999. The definition includes 'representation of instructions, data, sound or image including source code and object code recorded in a machine-readable form and capable of being manipulated or providing interactivity to a user, by means of an automatic data processing machine.' The Tribunal examined whether the imported data met these criteria. The Commissioner and experts concluded that the data cartridges did not contain executable programs, source code, or object code, and were not interactive, thereby failing to meet the definition of software.2. Eligibility for Exemption from Customs Duty:The appellants, ONGC Ltd. and Tullow India Operations Ltd., claimed exemption from customs duty based on the definition of IT software. The Tribunal found that the imported data cartridges did not qualify as software under the notification's definition. The data lacked source code, object code, and interactivity, and were merely digital representations of seismic survey responses, not executable programs.3. Interpretation of 'Source Code' and 'Object Code':The Tribunal referred to definitions from the Random House Webster's Computer and Internet Dictionary to clarify 'source code' and 'object code.' Source code is the original form of program instructions written by a programmer, while object code is the intermediary form produced by a compiler. The imported data did not contain these elements, further supporting the conclusion that the data was not software.4. Requirement and Timing of Producing Certificates:Tullow India Operations Ltd. argued that the exemption under Entry 184 of Notification 20/99 should apply, even though the required certificate from the Directorate General of Hydrocarbons was produced after importation. The Tribunal referred to a precedent in SKF Bearings India Ltd. v. CC, which held that the delay in producing such certificates should not bar the exemption. The Tribunal remanded the matter to the Commissioner to reconsider the acceptability of the certificates and the applicability of the exemption.5. Imposition of Penalties:The Tribunal found no justification for the penalties imposed on ONGC Ltd. There was no evidence that ONGC, a wholly owned Government of India corporation, sought to evade duty. The belief that the imported goods were software under the relevant notification was plausible. Consequently, the penalty on ONGC was set aside.Conclusion:The appeal of Tullow India was allowed and remanded to the Commissioner for reconsideration of the certificates and exemption eligibility. The appeal of ONGC was allowed in part, with the penalty set aside. The Tribunal confirmed that the imported data cartridges did not qualify as software under the notification's definition, thereby denying the claimed exemptions.
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