Machinery used in commodity production qualifies for exemption where the notification expressly covers production equipment.

Machinery used in the production process of a commodity was treated as eligible for exemption under Serial No. 50 of Notification No. 59/87. The imported agitator system was used in the anaerobic stage of methane production, and the tribunal applied an earlier ruling extending the same exemption to an agitator system used for production of a commodity. As the notification created a distinct exempt category for machinery used in production, the claim was accepted and the authorities' rejection was set aside.

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Issues: Whether the imported agitator system was entitled to exemption under Serial No. 50 of the table to Notification No. 59/87 as machinery used for production of a commodity.

Analysis: The claim to classification under Heading 8421.21 was not pressed, and the dispute was confined to the exemption entry. The relevant notification covered goods falling under specified sub-headings and also included machinery falling under Chapter Heading 84.79 for the production of a commodity. The imported goods were used in the anaerobic stage of methane production, and the expression used in the notification created a distinct exempt category for machinery used in production. The earlier tribunal ruling extending the same exemption to an agitator system used for production of a commodity was applied to the present facts.

Conclusion: The imported goods were held eligible for the benefit of exemption under Serial No. 50 of the table to Notification No. 59/87, and the rejection of the claim by the authorities was set aside.

Ratio Decidendi: Where a notification separately exempts machinery used for the production of a commodity, such machinery is eligible for the exemption if it is established that it is used in the production process of that commodity.

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