Notification No. 98/98-Cus. (N.T.), dated 21st December, 1998

Whereas, it appears that goods specified in Notification Nos. 13/81-Customs, dated the 9th February, 1981, 138/91-Customs, dated the 22nd October, 1991 and 140/91-Customs, dated the 21st October, 1991, Government of India, Ministry of Finance, Department of Revenue, were allowed import duty free for use in the units engaged in the development of computer software for the purpose of export and for providing consultancy services for development of computer software on site abroad subject to fulfilment of certain conditions given in the said notifications;

2. And whereas, some units engaged in the development of computer software have used the said goods for data entry and conversion, data processing, data analysis and control or data management for the purpose of export or for providing consultancy services for any or for all such activities on site abroad.

3. And whereas, the activities of data entry and conversion, data processing, data analysis and control or data management were not specifically covered under the said notifications and, the show cause notices have been issued to above such units for recovery of duty on the said goods for such activities not covered under the said notifications;

4. And whereas, said Notification Nos. 13/81-Customs, dated the 9th February, 1981, 138/91-Customs, dated the 22nd October, 1991 and 140/91-Customs, dated the 22nd October, 1991, had been amended by Notification Nos. 88/96-Customs, dated the 19th November, 1996 and 89/96-Customs, dated the 19th November, 1996 and 10/97-Customs, dated the 17th February 1997, respectively, to include the activities of data entry and conversion, data processing, data analysis and control and data management for export out of India or for providing consultancy services for any or all such activities on site abroad as the eligible activities for the duty free import of the goods specified in said Notification Nos. 13/81-Customs, 138/91-Customs and 140/91-Customs.

5. And whereas, Central Government is satisfied that the goods, specified under the said Notification Nos. 13/81-Customs, 138/91-Customs and 140/91-Customs, imported prior to the said amendments of these notifications, by the software developing units engaged in the activities of data entry and conversion, data processing, data analysis and control or data management for export out of India, although not used for specific purpose of development of software but were used for the processing of data entry and conversion, data processing, data analysis and control or data management for export out of India and as such the prime condition that the specified goods are required to be used for export production, for availing of the said exemptions was thus fulfilled.

6. And whereas, the Central Government is satisfied that according to a practice that was generally prevalent regarding levy of duty of customs and additional duty of customs (including non levy thereof) under the Customs Act, 1962 (52 of 1962), and section 3 of the Customs Tariff Act, 1975 (51 of 1975), on goods specified under the said Notification Nos. 13/81-Customs, 138/91-Customs and 140/91-Customs, the duty of customs and the additional duty of customs were not being levied during the period prior to the amendments of the said Notification Nos. 13/81-Customs, 138/91-Customs and 140/91-Customs for the activities of data entry and conversion, data processing, data analysis and control or data management.

7. Now, therefore, in exercise of the powers conferred by section 28A of the Customs Act, 1962 (52 of 1962), the Central Government, hereby directs that the duty of customs payable under First Schedule to the Customs Tariff Act, 1975 (51 of 1975) and additional duty, if any, payable under section 3 of the said Customs Tariff Act on the imports of specified goods, but for the said practice made by the units covered under said Notification Nos. 13/81-Customs, 138/91-Customs and 140/91-Customs for the process of data entry and conversion, data processing, data analysis and control or data management besides software development and exported out of India, shall not be required to be paid on such imports effected for the period upto the 17th February, 1997.