Judgment:
1. The respondents - M/s. Malvika Steel Ltd., Jagdishpur, U.P. filed two Bills of Entry dated 17-10-97 and 26-11-97 at the Air Cargo Unit, New Custom House, New Delhi, for clearance of a consignment of 'Computer Software' claiming exemption from payment of customs duty as per Sl. No. 173 of the Table annexed to the Notfn. No. 11/97-Cus., dated 1-3-97 as amended. This entry reads as follows : 2. The imported goods were examined and it was found that the first import of software was for use to control the speed of the drive motors which moved the heated billets from the re-heat furnace by regulating the RPM of the motors. The input to software was provided from the encoders, hot metal detectors, pyrometers, limit switch etc. The second import of software had been specially developed by the suppliers for management of data logging system of mini blast furnace and was to be used on computers for better control of blast furnace. The proceedings were, however, initiated against the importing party and the Asstt.
Commissioner of Customs, Air Cargo vide his order dated 15-6-98 held that where computer is performing some of the functions traditionally carried out by the machines in conjunction with which the computer is used, the software used for these computerised process cannot be treated as computer software and extended the benefit of Sl. No. 173 of Notfn. No. 11/97-Cus., dated 1-3-97. Consequently, he denied the benefit of the above notification to the importers.
3. The party filed an appeal and the Commissioner of Customs (Appeals), New Delhi vide his order dated 1-11-2001 allowed the appeal of the party. The Commissioner (Appeals) in allowing the appeal relied upon the following decisions:Hutchinson Max Telecom. Ltd. v. Commissioner of Customs, Mumbai - 2001 (132) E.L.T. 774 (Tribunal) - 2001 (43) RLT 967 (CEGAT-Mum.)BPL Mobile Communications Ltd. v. Commissioner of Customs, Mumbai The decision of the Tribunal in BPL Mobile at Sl. No. (iii) above, is upheld by the Hon'ble Supreme Court inasmuch as the Departmental appeal filed against this decision is dismissed by the Apex Court.
4. This is a Revenue appeal against the impugned order of Commissioner (Appeals). We have heard Shri R. D. Negi, SDR for the appellants. The respondents are not represented despite the notice. We have considered the submissions made before us. The case is fully covered in favour of the respondents by the above mentioned decisions. Further, the decision of the Tribunal in Final Order No. 240/2002-B, dated 21-5-2002 in the case of C.C. (ACU) , New Delhi v. Magnum Solution (P) Ltd. [2002 (150) E.L.T. 107 (T)] is also passed on the similar facts and on the same issue in which the appeal of the Revenue is rejected. The Tribunal have arrived at the following findings in the cited decision : "7. In the present matter, it has been mentioned by the Adjudicating Authority in the adjudication order that the different modules of software imported "are for computer aided design and manufacturing".
Even it is mentioned in the Memorandum of Appeal that design software includes features providing analysis of the data collected from machine used for manufacturing. The benefit of Notification is sought to be denied by Revenue on the basis that software in question also interact with special machine/instrument. But, such a condition has only been introduced by inserting Explanation to the Notification which is effective only from 11-2-1998 and as such the benefit of Notification 11/97-Cus. cannot be denied to the impugned software. We, therefore, reject the appeal filed by the Revenue".
5. The Tribunal decision in the case of Usha Martin Telekom. v.Commissioner - 2001 (138) E.L.T. 839 (T-Kolkata) is also against the stand of the Revenue. This order was taken up in appeal by the Revenue before the Hon'ble Supreme Court and the same has been dismissed by the Apex Court in the following terms, as reported in 2002 (140) E.L.T. A90 (S.C).
"The Supreme Court Bench comprising Hon'ble Mr. Justice S.P. Bharucha, Hon'ble Mr. Justice Y.K. Sabharwal and Hon'ble Mr. Justice Ashok Bhan on 17-8-2001 after condoning the delay dismissed the Civil Appeal No. D 12731 of 2001, filed by Commissioner of Customs, Calcutta against CEGAT Order No. 173/KOL/2001, dated 20-2-2001 and reported in 2001 (138) E.L.T. 839 (Tri.-Kolkata) (Usha Martin Telekom. Ltd. v. Commissioner). While admitting the appeal, the Supreme Court passed the following order : The Appellate Tribunal in its impugned order had held that Computer Software imported for expansion of Mobile Switching Centre (MSC) for telecorn purposes were entitled to the exemption benefit under Notification No. 11/97-Cus., dated 1-3-1997 at the relevant time and subsequent amendment to the said notification vide Notification No. 3/98-Cus., dated 11-2-1998 could not be given any retrospective effect".
6. On a specific query, during the course of hearing, the ld. SDR appearing for the Revenue did not dispute that the facts and the law involved in the present case are covered by the ratio of the afore-mentioned decisions of the Apex Court in Usha Martin Telekom.
Ltd. and the decision of the Tribunal in the case of M/s. Magnum Solutions (P) Ltd. 7. Following the ratio of the above decisions, therefore, we dismiss the appeal upholding the impugned order of Commissioner (Appeals).