M/s Steag Encotec India Pvt. Ltd. (‘Appellant’) imported Performance Analysis and Diagnostic Optimization System (‘PADO’) software package and Boiler Performance Optimization System software package (‘BPOS’) vide four Bills of Entry for use in coal based power plants run by Bharat Heavy Electrical Ltd.(‘BHEL’).
The appellant claimed that the software so imported was for specific use by BHEL plants and that they had been customized to suit the requirements of BHEL. Based on this contention, the appellant treated the software as ‘customized software’. The appellant claimed exemption from Additional Customs Duty and Education Cess, which are levied in lieu of Central Excise Duty at the time of importation of goods, vide in terms of Exemption Notification no. 6/2006-CE dated 01.03.2006 (‘subject notification’) wherein customized software is exempted from Central Excise Duty.
The Department’s view was that the same is not a custom designed software and hence ineligible for the exemption under the subject notification was confirmed by the adjudicating authority and upheld by the Commissioner (Appeals).
Being aggrieved by the Order of the Commissioner of Central Excise (Appeals), the Appellant preferred an appeal to the Customs, Excise and Service Tax Appellate Tribunal (‘CESTAT’).
Contentions of the Appellant
The Appellant put forth the following contentions to substantiate the plea that they were eligible to the exemption under the subject Notification –
