TaxTMI 
TaxTMI 
2026 (5) TMI 918
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....oner of Central Excise and Customs, Thiruvananthapuram. 2. Briefly the facts are that the appellant is an 100% Export oriented unit (EOU) who manufactured and exported 'Software' as per the Letter of Permission (LOP) issued by the Assistant Commissioner of Central Excise, Trivandrum. On investigations, it was found that appellant was clearing animated films and television serials, which was considered to be not 'software' to be classified under 8524.40 but to be classified under 8524.39; thus, demanding central excise duty. The Commissioner referring to the Encyclopaedia Britannica and the statements recorded during investigation held that the products were rightly classifiable under 8524.39, accordingly, confirmed the demand of duty alo....
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....). 3.2 On limitation, it is submitted that there is no misdeclaration of facts since they were under the bona fide belief that their products were classifiable under 'Software' since they manufactured and exported 'Software' which was not under dispute. Further, the expert's opinion also being in their favour, the question of misdeclaration or penalty does not arise. 4. The learned Authorised Representative (AR) reiterated the findings of the Commissioner in the impugned order and submitted that since the appellant has been clearing animated films, they cannot be classified as 'Software'. 5. Heard both sides. The question to be decided in this appeal is whether the products cleared by the appellant M/s. Toonz Animation India (P) Lt....
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....y software' given in the Customs Exemption notifications. They have also stated that their earlier version was without considering the above definition." 7. The Commission also rejects the opinion of the experts stating that they are not competent to interpret words and phrases in a statute. Let's examine definition of 'Information Technology Software' which is reproduced below: Information Technology Software' means "any representation of instructions, data, sound or image, including source code and object code, recorded in a machine-readable form, and capable of being manipulated or providing interactivity to a user, by means of an automatic data processing machine". 8. The experts who had initially stated that it is not a ....
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....4.39 - Other 8524.40 - Magnetic discs 11. Based on the above description, we find that the products cleared by the appellant in the form of CD are not a simple compact disc which when installed in the computer start functioning. On the other hand, they are CDs admittedly, which can function only with the software as discussed above which are supplied to the customers along with the CDs; therefore, they are rightly classifiable under CTH 8524.20 as 'Software'. 12. Secondly, we find that what is cleared by the appellant into DTA is animated advertisement films, TV commercials, animated cartoons, serials, logos etc., in a form of CDs/ Beta Cassettes. These all are also cleared as 'Software' for the purpose of export. Based on th....