1991 (3) TMI 277 - AT - Customs

Tribunal Grants Duty Exemption for Imported Software Under Customs Tariff

The Tribunal ruled in favor of the appellants, determining that the imported software in source code presented as running computer sheets qualified for ... Printed books - printed parts of books in the form of assembled or separate sheets constituting the whole or part of a complete work and designed for binding - designed for binding - interpretation of a notification with reference to the Tariff Schedule and Chapter Notes - application of Chapter Note 4(c) to Chapter 49 - interpretation under Section 20 of the General Clauses ActPrinted books - printed parts of books in the form of assembled or separate sheets constituting the whole or part of a complete work and designed for binding - designed for binding - interpretation under Section 20 of the General Clauses Act - Whether software in source code imported in the form of running computer sheets is eligible for exemption under Customs Notification No. 139/90 as 'printed books' falling under Heading 49.01 and Chapter Note 4(c). - HELD THAT: - The Tribunal held that the running computer sheets fall within Chapter Note 4(c) to Chapter 49 as 'printed parts of books' - i.e., printed parts in the form of assembled or separate sheets constituting the whole or part of a complete work and designed for binding. The absence of page numbering and the fact that the sheets were not imported bound did not preclude classification under Heading 49.01, because the Chapter Note expressly covers sheets designed for binding and the running sheets could be bound without reorganisation. The expression 'illustrations specially made for binding in books' in Serial No. 23 of Notification No. 139/90 was held to be a separate phrase and not indicative that only goods imported in bound form qualify. As the notification does not define 'printed books', its meaning is to be ascertained with aid of the Tariff Schedule; and, applying Section 20 of the General Clauses Act, expressions used in the notification are to bear the same meaning as in the enactment conferring the power, unless repugnant. On these grounds the Tribunal concluded that the goods qualify as printed books for the purpose of the notification and are entitled to its benefit. [Paras 6, 7]Impugned order set aside; appellants entitled to the consequential benefit of Notification No. 139/90 in respect of the imported running computer sheets.Final Conclusion: The Tribunal allowed the appeal, holding that the imported software in source code on running computer sheets falls within Heading 49.01 and Chapter Note 4(c) as printed books designed for binding, and is therefore entitled to the exemption under Customs Notification No. 139/90; the impugned order was set aside and consequential relief granted. Issues:- Eligibility for exemption from auxiliary duty of customs for imported software in source code in the form of running computer sheets.Analysis:1. Issue of Eligibility for Exemption: The central issue in this case was whether the imported software in source code, presented as running computer sheets, qualified for exemption from auxiliary duty of customs under Customs Notification No. 139/90. The Additional Collector of Customs had previously ruled against the appellants, stating that the software did not meet the criteria outlined in the notification, specifically Serial No. 23. The Collector emphasized that the software did not resemble printed books or sheets designed for binding and thus did not qualify for the exemption.2. Interpretation of Customs Tariff Schedule: The appellants argued that the imported software should be considered as printed books under Chapter Note 4(c) to Chapter 49 of the Customs Tariff Schedule. They contended that the running computer sheets constituted printed parts of books or booklets designed for binding, as mentioned in the statutory note. The appellants highlighted that the absence of page numbering and the software not being bound were not sufficient reasons to exclude them from classification as printed books.3. Legal Interpretation and Application: The Tribunal analyzed the contentions of both parties and examined the relevant legal provisions. They concluded that the running computer sheets could be deemed as constituting a printed book under Chapter Note 4(c) to Chapter 49. The Tribunal emphasized that the term 'printed books' in the notification should be interpreted in line with the definitions and aids provided in the Tariff Schedule. They invoked Section 20 of the General Clauses Act to support their interpretation, emphasizing that the meanings of terms in notifications should align with those in the governing regulations unless explicitly stated otherwise.4. Decision and Ruling: Considering the arguments and legal framework, the Tribunal set aside the previous order and granted the appellants the consequential benefit of the exemption from auxiliary duty of customs. The Tribunal's decision was based on the interpretation of the relevant legal provisions and the classification of the imported software as printed books under the Customs Tariff Schedule. The ruling favored the appellants, allowing them to benefit from the exemption as per Customs Notification No. 139/90.