Customs exemption for imported copper wire upheld where it was used in manufacturing notified DC Micromotors.

Imported self-bonding/self-soldering enamelled copper wire was held to fall within Customs Notification No. 64/95 because the factual material showed it was used in the manufacture of DC Micromotors specified as finished goods in the notification. Expert evidence accepted by the adjudicating authority indicated that the wire, together with the stator and rotor, formed a DC Micromotor in the watch manufacturing process. The Revenue's objection that no separate micromotor emerged as a distinct unit did not displace that evidence. Even on strict construction of the exemption, the goods were treated as covered by the relevant entry, and the exemption was rightly allowed; the demand was therefore not sustainable.

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Issues: Whether the imported self-bonding/self-soldering enamelled copper wire was entitled to the benefit of Customs Notification No. 64/95 dated 16-3-1995 on the footing that it was used in the manufacture of DC Micromotors specified as finished goods in the Notification.

Analysis: The imported goods were declared for use in DC Micromotors of the prescribed rating, and the adjudicating authority had accepted expert evidence that the wire, together with stator and rotor, formed a DC Micromotor during the manufacturing process of watches. The Revenue's contention that no separate micromotor emerged as a distinct unit did not dislodge the expert opinion relied on by the Commissioner. The imported item was covered by the relevant column of the Notification, and DC Micromotor was specifically listed as finished goods. On a strict construction of the exemption, the factual material still showed that the goods were used in the manufacture of the notified finished goods.

Conclusion: The benefit of the exemption Notification was rightly allowed and the demand was not sustainable.

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