1999 (10) TMI 381 - AT - Customs

Appeal Dismissed, Restored on PSU Status; Software Import Benefits Granted

The appeal was dismissed based on the appellant being considered a Public Sector Undertaking (PSU) and required to produce a clearance certificate. The ... Notification - Amendment when clarificatory - Refund Issues:1. Appellant's status as a PSU or a Society under Karnataka Society's Registration Act.2. Eligibility for benefit under Notification No. 70/81 for imported software.3. Interpretation of the amendment to the notification regarding computer software.4. Consideration of unjust enrichment in the case of imported goods.Issue 1: Appellant's status as a PSU or a Society under Karnataka Society's Registration Act.The appeal was dismissed based on the premise that the appellant was considered a Public Sector Undertaking (PSU) and was required to produce a clearance certificate. However, the appellants argued that they were not a PSU but a Society registered under the Karnataka Society's Registration Act, managed by a Governing Council. Consequently, they requested the order of dismissal to be recalled and reinstated. After hearing the submissions, the Final Order dismissing the appeal was indeed recalled and restored to its original number.Issue 2: Eligibility for benefit under Notification No. 70/81 for imported software.The appellants had imported software and claimed benefits under Notification No. 70/81. Initially, they paid duty under protest and later filed a refund application. The Asst. Collector rejected their plea citing the eligibility of magnetic media under the notification, as the matter was referred to the Department of Electronics (DOE) without receiving clearance. The appellants contended that a clarification notification, No. 276/90, issued by the Government of India, fully exempted computer software from customs duty when imported by Research Institutions. They argued that this notification clarified the eligibility for exemption, and the rejection of their appeal was incorrect.Issue 3: Interpretation of the amendment to the notification regarding computer software.The amendment notification, No. 276/90, clarified the inclusion of 'computer software' in the original notifications, No. 70/81 and No. 229/88. The Tribunal observed that the intention of the amendment was to explicitly grant exemption to computer software, removing any ambiguity present in the earlier notifications. Referring to a relevant case law, the Tribunal held that such clarificatory notifications have retrospective effect, amending the original notifications from their dates of issuance. As the appellants provided evidence of being a Research Institute, the Tribunal concluded that the amendment notification applied to them.Issue 4: Consideration of unjust enrichment in the case of imported goods.The appellants argued that the question of unjust enrichment did not arise as the imported goods were used for research purposes and not for commercial gain. This point was undisputed by the authorities, leading the Tribunal to set aside the impugned order and allow the appeal with consequential relief as per the law. Considering the overall facts and circumstances, the Tribunal ruled in favor of the appellants, emphasizing the exemption for computer software imported by Research Institutions.This detailed analysis of the judgment highlights the key issues addressed by the Appellate Tribunal CEGAT, MADRAS, providing a comprehensive understanding of the legal reasoning and conclusions reached in each aspect of the case.