Consumables excluded from customs exemption, but reusable pens qualified as recorder accessories without a duty certificate.

Notification No. 211/76-Cus. excluded consumable items from exemption, so chart paper and ink cartridges, being items consumed in use and not lasting components of the recorder, were outside the notification and exemption was denied. Pens, however, were treated as reusable parts or accessories of the scientific and technical recorder rather than consumables, so they fell within the exemption. The notification also allowed exemption on production of the NMIC alone where the Collector was otherwise satisfied about the goods' qualifying character, so insistence on a duty exemption certificate was not mandatory on these facts. The exemption was therefore sustained for the pens but not for chart paper or ink cartridges.

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Issues: (i) Whether chart paper and ink cartridges were consumable items excluded from Notification No. 211/76-Cus.; (ii) Whether the subject pens were parts or accessories of the recorder eligible for the notification and whether production of a duty exemption certificate was mandatory in the facts of the case.

Issue (i): Whether chart paper and ink cartridges were consumable items excluded from Notification No. 211/76-Cus.

Analysis: The notification specifically excluded consumable items from its coverage. Chart paper and ink cartridges were found to be items consumed in use and not retained as lasting components of the recorder.

Conclusion: The denial of exemption in respect of chart paper and ink cartridges was upheld and the finding was against the assessee.

Issue (ii): Whether the subject pens were parts or accessories of the recorder eligible for the notification and whether production of a duty exemption certificate was mandatory in the facts of the case.

Analysis: The pens were used repeatedly until worn out and were treated as parts and accessories of the scientific and technical recorder rather than consumable items. The notification also permitted exemption on production of the NMIC alone where the Collector was otherwise satisfied that the goods were scientific or technical instruments, apparatus or equipment, or their spare parts, components or accessories. On that footing, insistence on a duty exemption certificate was not warranted.

Conclusion: Exemption was available for the pens and the requirement of a duty exemption certificate was not mandatory; this issue was decided in favour of the assessee.

Final Conclusion: The appeal succeeded only with respect to the pens, while the refusal of exemption for chart paper and ink cartridges was sustained.

Ratio Decidendi: Goods expressly excluded as consumables cannot claim exemption under the notification, but items functioning as reusable parts or accessories of a qualifying instrument may be covered, and a certificate requirement stated as conditional need not be insisted upon where the notification permits exemption on the basis of alternate satisfaction.

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