Custom designed software exemption denied where imported modules were only modified packaged software, not newly developed for a specific user.

Exemption under Notification No. 6/2006-C.E. applied only to customized, custom designed software and excluded packaged or canned software. The imported PADO and BPOS modules pre-existed import, were used across multiple plants, and remained subject to proprietary rights, upgrade, and licensing arrangements, showing they were standard software packages modified for plant-specific parameters rather than new software developed from basic building blocks for a specific user. Because the exemption was an exception and had to be strictly proved by the claimant, the software did not satisfy the statutory description and the exemption was unavailable, leaving the import liable to duty.

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Issues: Whether the imported PADO and BPOS software packages were custom designed software eligible for exemption under Notification No. 6/2006-C.E., dated 1-3-2006, or were merely modified packaged software outside the exemption.

Analysis: The notification grants exemption only to customized software, expressly explaining it as custom designed software, and excludes packaged or canned software. On the facts, the software modules pre-existed import, were used in multiple plants, were supplied with proprietary rights retained by the developer, and were supported by upgrade and licensing arrangements. These features showed that the goods were standard software packages modified to suit particular plant parameters rather than software developed from the basic building blocks as a new product for a specific user. The exemption provision, being in the nature of an exception, had to be construed strictly, and the claimant had to clearly establish entitlement to it.

Conclusion: The imported software was held to be modified packaged software and not custom designed software, so the exemption was not available to the assessee.

Final Conclusion: The appeal failed because the imported software did not satisfy the statutory description of customized software and therefore remained liable to duty.

Ratio Decidendi: For exemption under a provision confined to custom designed software, software merely modified from existing packaged modules does not qualify; the claimant must strictly prove that the product was developed as a new custom-designed software for a specific user.

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