2000 (4) TMI 104

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.... the appellant company who is a mobile telephone service provider. These sectors are the call monitoring sector, base transceiver, and mobile switching centre. The fourth appeal relates to software for immediate switching. Notification 11/97 which was claimed, for the import of the said software (at serial 173 of the table) exempts from duty computer software falling under chapter 49 or heading 85.24 of the tariff. The Assistant Commissioner and Commissioner (Appeals) had both denied the benefit of notification relying upon a circular No. 7/98 dated 10-2-1998 of the Ministry of Finance. This circular dated 10-2-1998 is reproduced below : "Sub: Computer Software - Scope of exemption Under S. No. 173 of Notification No. 11/97-Cus, dated 1-....

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....corded in a machine readable form and capable of being manipulated or providing interactivity to a user by means of an automatic data processing machine falling under heading 84.71. Thus, the said exemption will be (not) (sic) cover software required for operation of any machine performing a special function other than processing and incorporating or working in conjunction with an automatic data processing machine. More specifically, software for telecom medical or other applications is not eligible for exemption from duty. However, software-containing encyclopedia, games, books, etc., will be eligible for the exemption whether they satisfy the interactivity criterion.  The pending assessment may be finalised in the light of the5. a....

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....d circuits and microprocessor assemblies used as central processing unit from classification under that heading and classify them under heading 84.42. Notes to chapter 84 in turn confirm classification under this heading of integrated circuits which is used as processing unit which themselves has application as micro processing. Such microprocessor would therefore be computers and generally understood, even if they are classified under heading 84.71. They confirm to the definition of the term. The McGraw-Hill Dictionary on Scientific and Technical Terms defines a computer as "a device that receives, processes and presents data" Literature produced by the appellant also confirms this view. The book 'An Introduction to Computer Studies' by No....

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....tch center software, one of the types imported by the appellant before us, is computer software. The Department of Electronics had said, on further clarification in the letter dated 25-3-1997 of Mrs. Harsh Prabha, Senior Scientific Officer that a computer is a general purposes devices that could be deployed for various end applications depending on software used. Flexibility of the intended application list 26 for the software must therefore in a proper term, other than audio video software is to be treated as computer software for the purpose of grant of exemption under notification 3/98 dated 11-2-1998 telecom software is software and hence the MSC (mobile switching centre) is a computer software. 5. Even on the assumption which the de....