Consistent tariff classification for exemption: power steering kit parts qualified for notification benefit, and contrary reclassification was rejected.

Power steering pump cleared as part of a power steering kit for an ordnance factory was treated as eligible for exemption under Notification No. 64/95-C.E. because the kit was classifiable under Heading 8708 and was used in the manufacture of vehicles falling under Chapter 87. The department could not deny the benefit by relying on a different classification adopted at another unit, since the same goods had already been accepted under Heading 8708 for other clearances. On that basis, the duty demand was held unsustainable and the exemption benefit was upheld.

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Issues: Whether power steering pump, when cleared as part of a power steering kit supplied to an ordnance factory, was eligible for exemption under Notification No. 64/95-C.E. dated 16-3-1995 notwithstanding its classification under Heading 8413 at the sister unit.

Analysis: The goods were admittedly cleared as components of a power steering kit classifiable under Heading 8708, and the same item had been cleared to private buyers under that heading on payment of duty without dispute by the department. The exemption notification covered parts of motor vehicles used in a Central Government ordnance factory for manufacture of vehicles falling under Chapter 87. In these circumstances, the department could not adopt a contrary stand by relying on a different classification at another unit, and the assessee's classification under Heading 8708 for the kit clearance was accepted as proper for availing the notification benefit.

Conclusion: The power steering pump, as cleared in the power steering kit, was entitled to the benefit of Notification No. 64/95-C.E. and the duty demand was unsustainable. The appeal was allowed in favour of the assessee.

Ratio Decidendi: Where the same goods are contemporaneously accepted by the department under a particular tariff heading for duty payment, the department is precluded from taking a contrary classification position for denying a beneficial exemption on the same goods when cleared as part of a kit covered by the notification.

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