Customs exemption linked to tariff classification fails where the end product does not meet the required Chapter 84 or 85 condition.

A concessional customs exemption under Notification No. 20/99-Cus. applied only where goods classifiable under Chapter 72 or 73 were used in manufacturing machines falling under Chapter 84 or 85. The Tribunal held that imported inputs used to make electrical laminations did not satisfy this tariff-linked condition because the end product was not classifiable under Heading 85, as indicated by the cited precedent. The exemption was therefore unavailable, and the Revenue's challenge succeeded with the benefit withdrawn.

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Issues: Whether the respondents were entitled to the benefit of Notification No. 20/99-Cus. dated 28-2-1999 for imported goods used in the manufacture of electrical laminations.

Analysis: The notification granted concessional duty to goods classifiable under Chapter 72 or 73 when used for manufacture of machines falling under Chapter 84 or 85. The imported goods were used in making electrical laminations, and the tribunal found that such laminations were not classifiable under Heading 85 of the Customs Tariff in light of the cited precedent. Since the condition linking the imported inputs to manufacture of goods falling under Chapter 84 or 85 was not satisfied, the exemption could not be extended.

Conclusion: The respondents were not entitled to the benefit of the notification.

Final Conclusion: The exemption claim failed and the Revenue's appeal succeeded by setting aside the order granting the benefit.

Ratio Decidendi: An exemption notification tied to manufacture of goods falling under specified tariff headings cannot be applied when the end product does not satisfy the required tariff classification condition.

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