Intended use, not tariff classification, governs exemption for crankshafts meant for specified internal combustion engines.

Crankshafts imported for use in internal combustion piston engines were treated as eligible for exemption under Notification No. 395/76 where they were shown to be meant for application in engines falling under Tariff Item No. 84.06, even if the crankshafts themselves were assessed under Tariff Item No. 84.63. The notification was read with the later clarificatory Notification No. 29-Cus./77 and prior administrative decisions, and the decisive test was intended use rather than the tariff classification of the parts themselves. On that construction, the wider exemption was applied to parts proved to be destined for the specified engines.

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Issues: Whether crankshafts imported for use in internal combustion piston engines were entitled to exemption under Notification No. 395/76, even though they were assessed under Tariff Item No. 84.63 rather than Tariff Item No. 84.06 of the Customs Tariff Act, 1975.

Analysis: The notification was construed in the light of the later clarificatory Notification No. 29-Cus./77 and earlier Government of India decisions on the same point. The decisive consideration was that the exemption depended on the parts being meant for application in engines specified in Tariff Item No. 84.06, and not on the parts themselves necessarily being classifiable under that tariff item. The wording of the notification was read as extending the benefit to parts shown to be intended for such use, and the prior administrative view was accepted as correctly resolving the grammatical ambiguity in favour of the wider exemption.

Conclusion: The crankshafts qualified for the benefit of Notification No. 395/76, notwithstanding their assessment under Tariff Item No. 84.63, and the appeal was allowed with consequential refund relief to the appellants.

Ratio Decidendi: For exemption under Notification No. 395/76, it is sufficient if the imported parts are shown to be meant for application in the engines specified in Tariff Item No. 84.06; the parts need not themselves be classifiable under that tariff item.

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