L.M.L. LTD. versus COMMISSIONER OF CUSTOMS

Citation: [2010] 12 S.C.R. 80 · Decided: 21-09-2010 · Supreme Court of India · Bench: MUKUNDAKAM SHARMA · Disposal: Dismissed

Judgment (excerpt)

A 
B 
c 
[2010] 12 S.C.R. 80 
L.M.L. LTD. 
v. 
COMMISSIONER OF CUSTOMS 
(Civil Appeal No. 3764 of 2003) 
SEPTEMBER 21, 2010 
[DR. MUKUNDAKAM SHARMA AND ANIL R. DAVE, 
JJ.] 
Customs Tariff Act 1975: 
Customs Tariff Headings 49. 06 and 49. 11; Sub-Heading 
8524.39 and 8524.90 -
'CD ROM' containing images of 
drawing and designs of engineering goods - Classification of 
- Held: Not classifiable under Tariff Heading 49. 06 or 49. 11 
0 
as other printed matter - Alternative plea for classifying the 
same under Sub-Heading 8524.39 or 8524.90 not acceptable 
- Thus, assessee not entitled for the benefit of Nil rate of duty 
under Notification No. 1712001 dated 1. 3. 2001 - Notifications. 
Classification of goods - Interference by Supreme Court 
E - Held: Classification of goods involves technical and 
scientific evaluation and analysis - Unless there is something 
patently wrong while classifying a particular product, 
interference not called for. 
F 
'Software' and 'data' - Distinction between -
Held: 
Software is a set of instructions that allows physical hardware 
to function and perform computations in a particular manner 
- Data is information that performs no computation and gives 
no enabling instructions to computer hardware but is ready 
G for processing by computer software. 
The question which arose for consideration in this 
appeal was whether a 'CD ROM' containing images of 
drawings and designs of engineering goods was 
H 
80 
L.M.L. LTD. v. COMMISSIONER OF CUSTOMS 
81 
classifiable under Customs Tariff Headings 49.06 or 49.11 
A 
of the First Schedule to the Customs Tariff Act 1975 or in 
the alternate under Sub-Headings 8524.39 or 8524.90. 
Dismissing the appeal, the Court 
HELD: 1. CD-ROM containing images of drawings 
and designs of engineering goods are not classifiable 
under the Tariff Heading 49.06 or under the Heading 49.11. 
B 
as other printed matter. The alternative plea of the 
appellant for classifying the same under Sub-Heading 
C 
8524.39 or 8524.90 of the Tariff is also not acceptable. 
Therefore, the appellant is not entitled for the benefit of 
Nil rate of duty under Notification No. 17/2001 dated 
01.03.2001. [Para 27] [95-C-D] 
2.1 The products fall under Heading 49.06 only if D 
consisting of originals drawn or written by hand or of 
photographic reproductions on sensitized paper and 
carbon copies of such originals. The use of the word 
'only' in the HSN Explanatory Notes goes to show that 
the said Heading was meant exclusively for that purpose 
E 
alone and not otherwise. The qualification that the plans 
and drawings have to be originals drawn by hand has to 
be construed strictly and cannot be given a liberal and 
wide meaning. The drawings and designs of the 
engineering goods in issue are not originals drawn by 
F 
hand but are images of drawings and designs which 
have been loaded or recorded on a CD ROM. There is no 
question of considering the said images in the CD ROM 
as photographic reproductions on sensitized paper or 
carbon copies of photographic reproductions. Thus, 
G 
images of drawing and designs of engineering goods 
recorded in the CD ROM would not fall within the domain 
of Heading of 49.06. The Explanatory Notes under the 
Harmonized Commodity Description and Coding System 
issued by the World Customs Organization popularly 
H 
82 
SUPREME COURT REPORTS 
[201 OJ 14 (S.C.R. 
A referred to as the HSN Explanatory Notes also supports 
the view. [Paras 9, 10 and 11] [89-G; 88-G-H; 89-A-B] 
B 
Collector of Central Excise, Shillong Vs. Wood Crafts 
Products Ltd (1995) 3 SCC 454, referred to. 
2.2. Heading 49.11 is in the nature of a residuary entry 
and covers all printed matter not more particularly 
covered by any of the other Headings of Chapter 49. In 
general, Chapter 49 is intended to include goods that are 
executed in paper. Chapter Note 2 contemplates any 
C printing produced under the control of a computer, but 
to include the images of drawing and designs of 
engineering goods recorded in the CD ROM within 
Heading 49.11 on the basis of the said Chapter Note 
would be incongruous. The scope of Heading 49.11 is 
D completely different. In any case, Chapter Note 2 would 
not be attracted. The images of drawing and designs of 
engineering goods recorded in the CD ROM would not 
be covered under any of the Sub-Heading under 49.11. 
E [Para 13] [90-F-H; 91-A-B] 
2.3 Under the Notification 17/2001 Cus dated 
01.03.2001, the Central Government exempted the goods 
of 

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