Re-imported rotors after repair qualified for concessional customs treatment, but scrap from reconditioning was not exempt.

Re-imported rotors sent abroad for repair and reconditioning were treated as goods falling within the scope of renovation or modernisation and were held eligible for assessment under Sl. No. 236 of Notification No. 21/2002-Cus. Unusable scrap generated during the repair process was not regarded as goods imported for renovation or modernisation and was held outside the claimed exemption under Sl. No. 3 of Notification No. 94/96-Cus. The concessional treatment was thus confined to the re-imported rotors, while the exemption claim for the scrap was rejected.

---

---

Issues: (i) Whether the re-imported rotors, after repair and reconditioning abroad, were eligible for assessment under Sl. No. 236 of Notification No. 21/2002-Cus. dated 01-03-2002; and (ii) whether the unusable scrap generated during repair/reconditioning was eligible for exemption under Sl. No. 3 of Notification No. 94/96-Cus. dated 16-12-1996.

Issue (i): Whether the re-imported rotors, after repair and reconditioning abroad, were eligible for assessment under Sl. No. 236 of Notification No. 21/2002-Cus. dated 01-03-2002.

Analysis: The re-imported rotors were treated as goods brought back after reconditioning for use in a power generation plant. In the light of the earlier Tribunal view relied upon, such goods were considered to fall within the scope of goods for renovation or modernisation covered by Sl. No. 236 of the notification.

Conclusion: This issue was decided in favour of the assessee; the re-imported rotors were held eligible for assessment under Sl. No. 236 of Notification No. 21/2002-Cus. dated 01-03-2002.

Issue (ii): Whether the unusable scrap generated during repair/reconditioning was eligible for exemption under Sl. No. 3 of Notification No. 94/96-Cus. dated 16-12-1996.

Analysis: The unusable scrap generated during reconditioning could not be treated as goods imported for renovation or modernisation. It was also not covered by the specific category claimed by the assessee under Sl. No. 3. The Tribunal held that such scrap fell within the residuary category applicable to goods other than those falling under Sl. No. 1 exported for repairs abroad.

Conclusion: This issue was decided against the assessee; the claim for exemption under Sl. No. 3 of Notification No. 94/96-Cus. dated 16-12-1996 was rejected.

Final Conclusion: The appeal succeeded only to the extent of the re-imported rotors being entitled to concessional treatment, while the claim relating to the scrap generated during repairs was rejected.

---