Exemption for machinery producing intermediate commodities cannot be denied where the notification does not require marketable output.

Concessional customs duty under Notification No. 17/2001-Cus. was held available to imported machinery used for production of commodities, even where the output consisted of intermediate products requiring further processing. Marketability was not treated as a separate condition because the notification did not impose it. The positive and negative plates produced by the machine were treated as commodities for the purpose of the exemption, as they were capable of use and replacement. The denial of exemption was therefore set aside, following the earlier Tribunal ruling relied on by the importer.

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Issues: Whether machinery imported and classified under sub-heading 8479.89 was entitled to the benefit of Notification No. 17/2001-Cus. on the ground that it was machinery for production of commodities, even though the goods produced were intermediate products requiring further processing.

Analysis: The notification granted concessional duty to machinery for production of commodities falling under the specified headings. The dispute turned on whether the positive and negative plates produced by the machine could be treated as commodities. The Court held that marketability as such was not the test where the notification did not impose such a condition. Since the plates were intermediate products capable of use and replacement, they constituted commodities for the purpose of the notification. The issue was treated as covered by the earlier Tribunal ruling relied upon by the appellant.

Conclusion: The appellant was entitled to the benefit of Notification No. 17/2001-Cus., and the denial of the exemption was set aside.

Final Conclusion: The imported machinery qualified for the concessional customs treatment available to machinery for production of commodities, and the adverse order of the lower authority could not stand.

Ratio Decidendi: Where an exemption notification extends concessional duty to machinery for production of commodities, the benefit cannot be denied merely because the output is an intermediate product requiring further processing, unless the notification itself makes marketability a condition.

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