2026-VIL-1082-CESTAT-BLR-CE
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CENTRAL EXCISE CESTAT Cases

Central Excise - Classification of animated films and television serials as software for Central Excise Duty purposes - Whether animated films and television serials in the form of CDs and Betacam SP Pal tapes, cleared in the DTA by a EOU constitute software liable to Central Excise duty or fall within the definition of information technology software exempt from such duty – HELD - The products constitute software under the statutory definition of information technology software, which encompasses any representation of instructions, data, sound or image recorded in machine-readable form and capable of being manipulated or providing interactivity to a user by automatic data processing machine - The products cleared by the appellant in the form of CD are not a simple compact disc which when installed in the computer start functioning. On the other hand, they are CDs which can function only with the software which are supplied to the customers along with the CDs, therefore, they are rightly classifiable under CTH 8524.20 as ‘Software’ - The experts initially opined the products were not software but revised their opinion during cross-examination when considering the statutory definition, rendering the original basis of the show-cause notice invalid - The unit operates under the Software Technology Park scheme with a Letter of Permission for development and export of software, and since the exports are not disputed as software, the products cleared in the DTA must similarly be software as there is no evidence that domestic and export products differ - The Department itself demonstrated confusion by classifying the same goods under different tariff headings in successive show-cause notices, indicating failure to understand the product description in terms of the statutory definition. The animated advertisements, commercials, cartoons and serials in CD form, which function only with accompanying software tools such as Animo, US-Animation and 3D Studio Max, are rightly classifiable as software. The impugned order demanding central excise duty is set aside - The appeal is allowed
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GSTAT Outreaches, Filing Intricacies...
By CA Vivek Jalan

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