1995(05)LCX0136
IN THE CEGAT, SPECIAL BENCH `C’, NEW DELHI
Shri S.K. Bhatnagar, Vice President and Ms. Jyoti Balasundaram, Member (J)
COLLECTOR OF CUSTOMS, MADRAS
Versus
TATA ELXSI INDIA LTD.
Order No. 130/95-C, dated 3-5-1995 in Appeal No. C/974/93-C with CO/506/93-C
Cases Quoted
Indian Metals & Ferro Alloys Ltd. v. Collector — 1990(11)LCX0014 Eq 1991 (051) ELT 0165 (S.C.) [Para 3A]
Roto Inks (P) Ltd. v. Collector — 1989(12)LCX0053 Eq 1990 (047) ELT 0398 (Tribunal) [Para 3A]
Advocated By : Shri Sharad Bhansali, SDR, for the Appellant.
Shri L.P. Asthana, Advocate, for the Respondents.
[Order per : Jyoti Balasundaram, Member (J)]. - M/s. Tata Elxsi India Ltd., Bangalore imported a consignment of Software comprising installation and users guide documentation packets and reference manual with a claim for classification under 4901 of CTA with no duty leviable thereon. The Assistant Collector of Customs in his order dated 27-8-1992 held that the goods imported are software in print media, not containing any textual matter and correctly classifiable under Heading 4911.99 leviable to duty at 65% basic plus 45% auxiliary with nil Additional duty. The respondents filed an appeal before the Collector (Appeals) who, in her order in appeal dated 24-6-1993, has held that the item imported is an installation and user guide for early consignments of oracle software imported and it is a operation system and specific components of a set of manuals, containing textual matter and allowed the appeal for reassessment of the goods under Heading 4901.10 duty free without the benefit of Customs Notification 95/92. Hence, this appeal by the Revenue.
2. We have heard Shri Bhansali, learned SDR for the appellants and Shri Asthana, learned Advocate for the respondents and record our findings below.
3A. Basic Customs duty - Heading 49.01 covers printed books, brochures, leaflets and similar printed matter, whether or not in single sheets. All the sub-headings of 49.01 carry nil rate of duty. The case of the department is that the goods in question are covered by Heading 49.11. Heading 49.01 is a residual heading and unless the goods are excluded from Heading 49.01, they cannot be classified under 49.11. Heading 49.01 has therefore, a clear priority over Heading 49.11. This principle has been settled by the decision of the Supreme Court in the case of Indian Metals and Ferro Alloys Ltd. v. Collector of Central Excise reported in 1990(11)LCX0014 Eq 1991 (051) ELT 0165 (S.C.) = 1991 (033) ECR 0011 (SC). The Supreme Court has observed that “It is a settled principle that unless the department can establish that the goods in question can, by no conceivable process of reasoning, be brought under any of the specific items mentioned in the tariff, resort cannot be had to the residuary item.” It is the submission of the importer that the goods are books. They contain technical information for technical people who will be using the software. Therefore, the primary requisite of a book namely that it must convey some valuable information or material to the reader, is satisfied. The Technical Manual imported contains textual matter which is clearly valuable and informative. The layout of the manual, its contents, running page numbers of different chapters clearly show that the manual is a book. In the alternative, the importer submits that Heading 49.01 covers brochures, leaflets and similar printed matter. The term `brochure’ is defined in the Concise Oxford Dictionary, as `a pamphlet or leaflet, especially one giving descriptive information’. Moreover the word `similar’ qualifies all the proceeding articles namely, printed books, brochures, leaflets. The preface to the manual shows that information therein includes -
- “architecture of the ORACLE RDBMS under IRIX;
- procedure for installing the ORACLE RDBMS (the first time and subsequently).
The following conventions are observed in the manual :-
Key names : Key names appear in capital letters and are enclosed in square brackets, as in (RETURN).
Variables : Variables appear in italics in the text. In examples, variables are sometimes shown in italics sometimes enclosed in angle brackets. Substitute an appropriate value."
That the goods are covered by Heading 49.01 is also supported by the decision of the Tribunal reported in 1989(12)LCX0053 Eq 1990 (047) ELT 0398 (Tri.) = [1990 (028) ECR 25]. Thus there can be no doubt that the goods imported fall under Heading 49.01 and are therefore, free from basic customs duty.
3B. Notification No. 95/92 : This notification exempts software in source code from the whole of the duty of customs leviable under the First Schedule and also the Additional duty of customs. The Assistant Collector held that the goods imported are not software in source code. This view has been upheld by the Collector (Appeals). It is an admitted position that the goods imported are not software either in subject code or object code. The software had been imported in earlier consignments. The technical manuals in question only contain instructions to the user of the computer to enable to instal and use the software and not being software either in source code or object code, they are not entitled to the benefit of Notification No. 95/92.
3C. Notification No. 121/92 : Sl. No. 26 of this notification exempts the following goods falling in Chapters 49 and 99 from the whole of the auxiliary duty. “Paper money, printed books (including covers for printing books), periodical (including newspapers) maps, charts, plans, drawings and designs, proofs, music manuscripts and illustrations specially made for binding in books”.
The importer submits that the goods in question are books and therefore, fall within the ambit of this notification and no auxiliary duty is chargeable. The goods contain a textual matter containing specific information. For a publication to be considered as a book, there is no requirement that it must be usable by public at large. Most of the technical books can be used by technical people only. Here also, anyone who wants to use the software already imported can use this manual. There is also no requirement that a book should contain a text of any particular kind. The nature of binding whether loose leaf or otherwise is also not relevant. A book is generally arranged subjectwise in different chapters and deals with distinct subjects in a rational manner. There is some amount of continuity and inter-relationship between the various portions of a book. If one takes into consideration all these aspects, the manual can certainly be treated as a book. A book is a non-periodical printed publication containing certain subject matter, and the manual in question satisfies this criterion. Hence it is entitled to the benefit of this notification.
4. In the result, we uphold the finding of the Collector (Appeals) on classification and further extend the benefit of Notification No. 121/92 to the imported goods.
5. The appeal is disposed of in the above terms.
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Equivalent 1995 (78) ELT 370 (Tribunal)