Exported software on tapes or discs qualifies as goods or merchandise for deduction under section 80HHC.

Computer software exported on tapes or discs was treated as "goods or merchandise" for deduction under section 80HHC because the provision used clear and unambiguous language, and nothing could be read into it by implication. The later insertion of section 80HHE could not be used to narrow the scope of the earlier provision, as a subsequent incentive provision does not curtail an earlier one that admits of no ambiguity. Applying the ordinary and statutory meanings of the terms, and noting the software's tangible physical medium, the export qualified for the deduction; the assessee's claim was therefore upheld.

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Issues: Whether computer software exported on tapes/discs constituted "goods or merchandise" for the purposes of deduction under section 80HHC of the Income-tax Act, 1961, and whether the later insertion of section 80HHE could be used to narrow the scope of the earlier provision.

Analysis: The deduction under section 80HHC was available in respect of export of "goods or merchandise" and the language of that provision was held to be clear and unambiguous. In taxing statutes, nothing can be read in by implication, and a later enactment cannot be used to restrict the meaning of an earlier provision when the earlier provision admits of no ambiguity. The subsequent introduction of section 80HHE was treated as a separate incentive provision for software exports, intended to cover software in physical and non-physical forms not necessarily covered by section 80HHC. Applying the ordinary and statutory meanings of "goods" and "merchandise", and noting that the software was recorded on tapes/discs having tangible physical form, the exported software was held to fall within those expressions. The rule of ejusdem generis also supported reading the expressions in a cognate sense.

Conclusion: The exported computer software on tapes/discs qualified as "goods or merchandise" under section 80HHC, and section 80HHE could not be invoked to deny that deduction; the issue was decided in favour of the assessee.

Ratio Decidendi: Where the language of an earlier taxing provision is clear, a later enactment cannot be used to curtail its scope; software reduced to a tangible physical medium may constitute "goods or merchandise" for export deduction purposes.

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