Customs, Excise and Gold Tribunal Bangalore Bpl Telecom Ltd. vs Commissioner Of Customs, Cochin on 8 February, 2002 Equivalent citations: 2002ECR152(TRI.BANGALORE), 2002(142)ELT258(TRIBANG) ORDER S.S. Sekhon, Member (T) 1. The appellants are manufacturers of Push Button Telephones, Electronic Private Automatic Branch Exchanges (EPABX) etc and in connection with the manufacture of these items they have imported various components, parts etc, including voice mail cards computer software which were cleared by classifying them under Heading 8529.90. A show cause notice dated 12698 was issued demanding duty amounting to Rs. 3,87,896/ on the ground that "As per Ministry's clarification circular the exemption under Serial 173 of Notification No. 11/97 is applicable to software required for operation of a data processing machine falling under Heading 84.71 only. Hence the concession cannot be applied to other softwares". 2. The lower authorities came to the conclusion that a write up submitted related to 'computer software' voice message system and at page 3.3 of the said write up indicated as computer is a power multi application voice processing software, so it would be called an application software for voice mail card which form part of EPABX and since Notification 89/95 clearly states that benefit under that notification was applicable only to computer software, the benefit availed was denied and the department confirmed the order. 3. In appeal, the Commissioner (Appeals) came to the following findings : "04.011 have examined the disputed point and the scope of the expressions computer software used in the Customs Notfn. 11/97 in its common parlance meaning in consultation with experts and ascertaining the practice of assessment following other Air Cargo Complexes. 04.02 It is reported that for the purpose of customs classification/ notification, the word computer is interpreted as an automatic data processing machine under CTH 8471 and therefore computer software refers only to software capable of being processing machine falling under CTH 8471. Thus the expression will not cover other than data processing. Software for telecom, medical and other applications are not generally referred to as computer software for customs purpose. 04.03 In the instant case, the software is basically a telecom software. Most of the EPABX has got facility to save voice mail, but the memory space of EFABX for storing voice mail is minimal and hence VMC and the software is used to store the voice mail in the computer hard disk. The voice mail card and the application software performs a specific function by itself and does not have any data processing involved in its function and therefore the particular software cannot be classified as computer software for assessment purpose. 04.04 As regards the contention of the appellant that the inclusion clause in the explanation relates to software which is installed in a machine other than a data processing machine and as in their case the software installed inside the computer forms a part or accessory of the computer, the item imported is a computer software, it may be noted that as the criteria adopted for categorizing a software as a computer software (for the purpose of Customs Notification) is the specific function of the software and the common parlance meaning and not ihe place of installation of the same, the cpntention is not technically correct and legally acceptable. 04.05 Similarly, the other contention that as the software in question processes data and works in conjunction with a data processing machine it is not covered by the expression "computer software" prior to 11298. i.e. the date of insertion of "Explanation" of computer software in the notification or by the legal definition of computer software incorporated in the Notification 11/97 vide Notfn. 3/98Cus., dated 11298, it may be noted that even telecom software was later separately indicated at SI. No. 207 of Notfn. 23/98cus., dated 2698." And therefore classified the 'Voice Mail Card' under 8524 and concluded that order of denial of benefit under Notification 59/95 was applicable to computer software & herein it was legal and proper. The computer software imports in the present case were required to pay the actual duty under 8524 at the time of import with interest. 4. We have heard both sides and considered the submissions and find: (a) It is submitted by the appellants that the said software contains instructions to be used to control the operation of PC based on voice mail card which is a hardware inserted into the computer. When an incoming call from EPABX is transferred to an extension line and when the .extension is unanswered then the call is redirected to the computer. The voice mail card then operates to convert the redirected call to digital data, by the software therein via hard disk of the computer. When such call data is required to be