COMMISSIONER OF CUSTOMS, CHENNAI versus M/S. PENTAMEDIA GRAPHICS LTD.

Citation: [2006] SUPP. 2 S.C.R. 139 · Decided: 09-05-2006 · Supreme Court of India · Bench: ASHOK BHAN · Disposal: Dismissed

Judgment (excerpt)

COMMISSIONER OF CUSTOMS, CHENNAI 
v. 
M/S. PENTAMEDIA GRAPHICS LTD. 
MAY 9, 2006 
[ASHOK BHAN AND MARKANDEY KA TJU, JJ.] 
Customs duty-Exemption from under Customs Notification No.20199-Cus 
-Of imported 'Motion Capture Animation Files '-Held: The imported good 
in question is entitled to exemption under the Notification as the same is an 
'Information Technology Software'. 
Words and Phrases: 'Sofiware'-Meaning of 
In the present appeal, the issue for consideration was whether the 
imported goods i.e. 'Motion Capture Animation Files' would come under 
the purview of Customs Notification No.20/99-Cus as 'information 
technology software' for claiming exemption from payment of duty. 
Dismissing the appeal, the Court 
HELD: 1. The goods under import are computer software recorded 
A 
B 
c 
D 
in a machine readable form and capable of being manipulated by means 
E 
of an automatic data processing machine. 1145-C-D) 
2. It cannot be said that the 'Capture Animation Files' are not 
software since another software is required to load the same. If software 
is required to load a programme on the computer then the programme 
which has to be loaded on the computer continues to be.software and 
F 
entitled to exemption under Notification No.20/90-Cus. (144-F-G) 
3. The programming aids are also known as softwl!re and thus the 
goods in question would fall within the meaning of the word "software". 
The goods under import are admittedly data recorded on tapes. Under 
the existing Notification No.20/99 any kind of data in a machine readable 
G 
form and capable of being manipulated by means of an automatic data 
processing machine would be covered by the term "Information 
Technology Software". (145-A-C) 
Random House Compact Unabridged Dictionary; Mc Graw Hill 
139 
H 
140 
SUPREME COURT REPORTS [2006] SUPP. 2 S.C.R. 
A Enlyclopedia of Science and Technology and Encyclopedia Britannica, 
referred to. 
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 2576 of2001 
From the Judgment 10rder dated 22.8.2000 of CEGAT. South Zonal 
B 
Bench at Madras in Appeal No. C-314.'2000. 
B.B. Singh, K.Swami, Kumar Rajesh Singh for P. Parmeswaran, Advs., 
for the Appellant. 
V. Sridharan, Alok Yadav, Adv. for M.P. Devnath, Advs., for the 
C 
Respondent. 
The Judgment of the Court was delivered by 
BHAN, J.: 
D 
The issue involved in the present case is : whether the imported goods, 
i.e. 'Motion Capture Animation Files" will come under the purview of 
Customs Notification No. 20/99 as 'information technology software' for 
claiming exemption from payment of duty? 
Respondent/assessee (for short "the Respondent imported "Motion 
E 
Capture Animation Files' valued at Rs. 7,02,58,125 and classified them 
under heading 85.24 and claimed exemption from payment of customs duty 
under notification No. 20/99-Cus. It will be convenient to refer to the relevant 
portion of the notification : 
F 
G 
H 
''85.24 - (i) Information technology software, and 
(ii) Documt.nt of title conveying the right to use Information 
Technology software. 
Explanation : - "information technology Software 'means any 
representation of instructions, data, sound or image including 
source code and object code, recorded in a machine readable foun, 
and capable of being manipulated or providing interactivity to a 
user. by means of an automatic data processing machine. 
[Hereinafter referred to as the 
'amended notification'] 
COMMR. OF CUSTOMS, CHENNAI 1·. MIS PENT AMEDIA GRAPHICS LTD. [BHAN, J.] 141 
It may be noted that this explanation substituted the explanation in the 
A 
earlier notification no. 23/98 which read as : 
"Explanation. - 'Computer software' means any representation of 
instructions, data, sound or image, including source code or object 
code, recorded in a machine readable fonn, 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. 
(Hereinafter referred to as 
the 'original notification] 
The assessing authority vide his order dated 25 .11.1999 denied the 
benefit of the notification although he did not dispute the classification of 
the goods under heading 85.24 as software. Against the order of the 
Assessing Authority, Respondent filed an appea

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