The Hindu Business Line : Animation creates illusion of life

There's a lot of action in the animation field. Intel Capital, the venture capital investment arm of Intel Corporation, has announced an investment in Real Image, a Chennai-based digital technology solutions provider for the film, video, audio and animation industry worldwide, as www.televisionpoint.com informs in a May 25-dated story.

A more recent report on the site, which is about GV Films planning to raise Rs 125 crore, mentions that the company board has discussed the acquisition of facilities for computer graphics and animation. "Hanuman, India's biggest animation blockbuster is being showcased in an episodic mini-series format on Disney Channel," if you aren't aware. International Festival of Erotic Animation is coming up in October, alerts http://news.awn.com.

"Asia's largest film, television, animation and media arts institute," is to open in July, alerts Gulf News, United Arab Emirates, `13 hours ago.' India's first 3-D character animated children's film Magik was at the Cannes film festival, one learns from www.indiaglitz.com. "India could use 3,00,000 professionals in content development and animation by 2008, up from 27,000 three years ago," estimates NASSCOM, the software industry body. Interestingly, a Jammu-datelined report of May 25, on www.greaterkashmir.com is sabout a seminar on 3D animation and visual effects organised by the Department of Urdu Professionals in collaboration with Maya Academy of Advanced Cinematics.

The animation industry looks quite animated, you'd agree. And things are happening in courtrooms too. Take for instance, Commissioner of Customs, Chennai vs Pentamedia Graphics Ltd, decided by the Supreme Court on May 9. The story begins with Pentamedia importing `motion capture animation files' valued at Rs 7,02,58,125 and classifying them under heading 85.24.

IT software

Heading 85.24 included `information technology (IT) software,' and also `document of title conveying the right to use IT software.' IT software was defined as "any representation of instructions, data, sound or image including source code and object code, recorded in a machine-readable form, and capable of being manipulated or providing interactivity to a user, by means of an automatic data processing machine."

Animation can explain whatever the mind of man can conceive, says Walt Disney. "This facility makes it the most versatile and explicit means of communication yet devised for quick mass appreciation." Except, perhaps, by the taxman. For, when Pentamedia claimed exemption from payment of customs duty under a notification that gave tax benefit to IT software, the assessing authority denied the benefit of the notification.

Data vs software

Pentamedia approached the Commissioner of Customs (Appeals), but met only with disappointment when his ruling was adverse. "Goods are in the nature of files containing positional information i.e., certain actors are asked to perform with sensors attached to their bodies and these motions are shot with the help of infrared cameras and recorded in the tapes," read the Commissioner's order. "This positional information is transferred on the created objects so that they perform in a similar manner. The transfer of this data on to the object is done with the help of a software known as `soft image'."

Accordingly, "goods imported are in the nature of data recorded in the tapes, which can only be transferred to other objects using software which is not part of the imported consignment," reasoned the Commissioner. "Goods imported do not consist of a program which would enable the manipulation of the files... they are not capable of being manipulated but remain mere information. Thus, even though the files contain data in a machine-readable form, they are not capable of manipulation. They also do not provide interactivity to the user, as it is only a data and no program or set of instructions are contained in the cartridges."

In short, what was imported was data, not software, said the order. "Animation is about creating the illusion of life. And you can't create it if you don't have one," says Brad Bird. And the illusion of the taxman was broken when Pentamedia approached the Tribunal. Because there, the decision went in favour of the company.

IIT professor's view

Aggrieved, the Department moved an appeal before the apex court, and hence the case. There, B. B. Singh argued for the taxman that the imported goods were only data and not program or set of instructions and therefore not covered under the notification. For Pentamedia, V. Sridharan represented that any kind of data that was capable of being manipulated by automatic data processing would be covered by the term IT software.

He placed reliance on a letter written by S. Raman, Associate Professor, Department of Computer Science and Engineering, IIT, Madras, in response to the query raised by the Department.

Justices Ashok Bhan and Markandey Katju of the apex court heard the arguments and looked into the definition of `software' in dictionaries and encyclopaedias. They also studied Raman's opinion; he had stated that `motion capture animation files' are normally referred to as software in the industry. These files are computer software recorded in a machine-readable form and are capable of being manipulated, though the files could not be used as independent entities, Raman had noted. "If software is required to load a program on the computer then the program which has to be loaded on the computer continues to be software," said the court.

"Simply because the `motion capture animation files' requires another software known as `soft image' to get the final result does not detract the goods under import from being software," it ruled.

Tailpiece

"The officer was searching under the table, when I went to see him."

"Looking for `something', perhaps?"

"Yes, the stock market graph, which was falling steadily down!"

http://Detaxification.blogspot.com

D. Murali

More Stories on : Taxation | Detaxfication | Entertainment & Leisure

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
Energies of competition

Damn not the market

Animation creates illusion of life

Disallowing ERP expenses can be costly

`Adventurous' property deals

A tax leg-up for bank deposits

`Judged' not taxable

However big the loss, true gamblers will survive