S.S. Sekhon, Member (T)
1. This appeal is on a short point against the following findings of Commissioner (Appeals):
“As seen from the records the goods are in the nature of files containing positional information i.e. certain actors are asked to perform with sensors attached to their bodies and these motions are shot with the help of infrared cameras and recorded in the tapes. This positional information is transferred on to created objects so that they perform in a similar manner. The transfer of this data on to the object is done with the help of a software known as “soft image”. In other words, the goods imported are in the nature of data recorded in the tapes which can only be transferred to other objects using software which is not part of the imported consignment. It is significant that the goods imported do not consist of a programme which would enable the manipulation of the files. In that sense, in the condition in which they have been imported, they are not capable of being manipulated but remain mere information. Thus, even though the files contain data in a machine readable form they are not capable of manipulation. They also do not provide interactivity to the user, as it is only a data and no programme or set of instructions are contained in the catridges. For the above reasons, I find no infirmity in the order of the lower authority holding that the goods are not eligible for the benefit of exemption under Sl. No. 231 of the Table to the Notification 20/99-Cus.”
2. Heard the learned Consultant and the learned DR. After considering the submissions, we find that the issue revolves around interpreting the explanation under the Sl. No. 231 in Notification No. 20/99-Cus., dated 28-2-1999, which reads as follows :
231 Explanation. – “Information Technology Software” means any representation of instructions, data, sound or image including source code and object code, recorded in a machine readable form,
This explanation was constituted from the explanation in the earlier Notification No. 23/98 which reads as follows :
206. Explanation. – ‘Computer Software’ means any representation of instructions, data, sound or image, including source code or 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 falling under heading No. 84.71, but does not include software required for operation of any machine performing a specific function other than data processing, and incorporating or working in conjunction with an automatic data processing machine.
3. A comparison of these two explanations to understand the coverage of the words ‘Information Technology Software’ to be understood and applicable in the Notification would indicate that in the subsequent Notification No. 20/99 the following clause:
“but does not include software required for operation of any machine performing a specific function other than data processing, and incorporating or working in conjunction with an automatic data processing machine”.
has been excluded. A plain reading of the explanation as it exists in Notification No. 20/99 would to our mind indicate that any kind of data which is capable of being manipulated by means of an automatic data processing machine would be covered by the term Information Technology Software as per the explanation in Notification No. 20/99. Since this deletion from the Notification No. 23/98 is very relevant and increases the scope of the software which can be now imported duty free under Notification No. 20/99, we do not find any reason to restrict the nature of the software programme under import and deny the benefit of notification when such software programme do not have part of the programme which would enable the manipulation of the files in programme under import. Since that could be already available in the automatic data processing machine in the earlier programmes by the said importer. The learned Commissioner (Appeals)’s finding might have had a relevance under Notification No. 23/98, but due to the amendment in the explanation clause and the amended clause in Notification No. 20/99, the Commissioner (Appeals)’s interpretation cannot be upheld. The goods under import are admittedly data recorded on tapes and would be entitled to the benefit of notification.
4. In view of our findings, the appeal is allowed as we do not find any reason to uphold the order of Commissioner (Appeals).