2003 (9) TMI 383 - AT - Central Excise

Appellate Tribunal rules on customs duty exemption for combined machines under Notification No. 17/2001-Cus

KONKAN SYNTHETICS FIBRES LTD. Versus COMMISSIONER OF C. EX., MUMBAI

The Appellate Tribunal overturned the decisions of the Adjudicating Dy. Commissioner and the Commissioner (Appeals) regarding the categorization of ... Warping machine - High speed draw warping machine Issues:Coverage of impugned goods under Notification No. 17/2001-Cus.Analysis:The dispute in this case revolves around the categorization of the imported goods under Notification No. 17/2001-Cus. The imported machine was declared as a 'Karl Mayer High Speed Draw Warping Machine,' but the Adjudicating Dy. Commissioner found that it did not meet the criteria specified in List 18A of the notification. The Commissioner (Appeals) also rejected the appellant's contentions, emphasizing that the machine did not qualify for exemption due to the presence of a separate drawing unit and the absence of pneumatic suction devices required for exemption eligibility.The Commissioner (Appeals) based his decision on detailed reasoning, distinguishing the case from precedents like Jupiter Radios v. Collector of Customs, Bombay. It was noted that the impugned goods did not primarily function as a warping machine with an additional drawing unit. The Commissioner referred to authoritative sources like Fairchild's Dictionary of Textiles to support the conclusion that the drawing unit did not enhance the warping machine's effectiveness. Additionally, drawing machines for specific purposes were separately listed in the notification, indicating that they could be exempted individually but not as part of another machine.Upon review, the Appellate Tribunal disagreed with the lower authorities' interpretation. They considered that a combination of drawing and warping machines should also be entitled to exemption under the notification. Despite the absence of pneumatic suction devices and the loose usage of the term 'with' in the notification, the Tribunal leaned towards a liberal interpretation. They highlighted the optional nature of importing accessories and the Textile Commissioner's recommendation, ultimately allowing the appeal and setting aside the lower authorities' orders.In conclusion, the judgment clarifies the interpretation of the notification's requirements, emphasizing the eligibility of combined machines for exemption and the importance of considering recommendations and the wording of the notification in a liberal light.