Electronic control exemption for imported plant upheld where PLC-based operation satisfied the notification condition despite electrical functions.

An imported Asphalt Hot Mixing Plant was treated as eligible for exemption under Notification No. 21/2002-Cus. because the bill of entry, invoice and independent engineering report showed that it operated through PLC-based electronic controls, enabling automatic, semi-automatic and manual modes. The departmental panel report was not preferred, as it was not treated as the proper independent technical opinion and did not displace the evidence of electronic control. The key principle applied was that exemption cannot be denied merely because the plant also involves electrical operation, so long as the goods satisfy the notification condition of being electronically controlled. The impugned order was set aside in favour of the assessee.

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Issues: Whether an imported Asphalt Hot Mixing Plant with electronic controls and bag type filter arrangement was eligible for exemption under Notification No. 21/2002-Cus. (S.No. 230) as a plant with electronic controls.

Analysis: The description in the bill of entry and invoice showed the plant as an Asphalt Hot Mixing Plant with electronic controls. The inspection report of an independent engineering agency stated that the plant operated through PLC and that the electric control system enabled automatism, semi-automatism and manual control. On that basis, the plant was held to be electronically controlled. The departmental panel report was not accepted because it was not treated as the proper independent technical opinion, and in any event the report itself did not displace the finding that PLC controlled the plant electronically. The objection based on strict compliance with the notification did not survive once the plant was found to satisfy the exemption condition.

Conclusion: The plant was eligible for the exemption and the impugned order was set aside in favour of the assessee.

Ratio Decidendi: Where the record and independent technical evidence show that the imported goods are electronically controlled, exemption cannot be denied merely because some electrical operation is also involved, and a departmental panel report will not prevail over reliable independent technical opinion on the character of the plant.

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