Outboard motors treated as marine engines for customs exemption because their principal function is vessel propulsion.

Outboard motors imported for marine use were treated as marine engines for exemption under Notification No. 281-Customs of 1976 because their principal function was propulsion of a water-borne vessel. The analysis applied the tariff rule for composite machines, under which classification follows the component performing the principal function, and found that size, fuel type, stroke pattern, or detachable character did not change the essential character of the goods. The same meaning of marine engines was held to apply consistently for tariff classification and exemption purposes, reinforced by Section 20 of the General Clauses Act, 1897, and exemption was directed to be granted.

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Issues: Whether outboard motors imported for marine use are covered by the expression "marine engines" for the purpose of exemption Notification No. 281-Customs of 1976.

Analysis: The goods were accepted as engines under Heading 84.06 of the Customs Tariff Act, 1975, and the interpretative note on composite machines required classification according to the component performing the principal function. The principal function of an outboard motor is propulsion of a water-borne vessel, and its size, fuel type, stroke pattern, or detachable character did not justify excluding it from the broader category of marine engines. The same meaning was held to govern both tariff classification and the exemption notification, reinforced by Section 20 of the General Clauses Act, 1897.

Conclusion: Outboard motors were held to be marine engines for the purpose of Notification No. 281-Customs of 1976, and the exemption was directed to be granted.

Final Conclusion: The revision application succeeded and consequential relief followed from the acceptance of outboard motors within the exempted category of marine engines.

Ratio Decidendi: Where a composite marine propulsion unit performs the principal function of an engine, it must be classified and treated consistently as a marine engine for both tariff and exemption purposes.

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