Govt can impose duty on engineering design CDs: SC

NEW DELHI: The Supreme Court has ruled that the revenue department can impose appropriate duty on the import of CD ROMs containing images of drawing and designs of engineering goods. The assessees cannot claim clearance of such goods at zero duty, said the apex court.

The court rejected the plea of assessee, LML , which had said that CD-ROM imported by it containing drawings and designs of engineering goods represents the right to use information and technology. So, such goods shall fall under the heading of the Customs Tariff Act 1975 which provides for nil rate of duty.

The court said, “What is made duty free is the Compact Disk Read Only Memory (CD-ROM) as it is and not a disc containing certain drawings and designs”. It further said that the data in a compact disk does not fall within the meaning of the term ‘software’ to entail the benefit of circular of March 1, 2003.

“There can be no doubt that such engineering drawings and designs do not provide instructions for the computer hardware to perform. At best, the said drawings and designs can be said to be are by-products and outputs of the computer software, which generate the designs and drawings. Therefore, such engineering drawings or designs data in a CD cannot be placed in the category of the term software”, said a bench comprising Justice MK Sharma and Justice Anil R Dave.