Customs exemption for hotel marble slabs turned on whether functional use in service delivery made them part of plant.

Marble slabs imported for a five-star hotel under an EPCG licence were treated as "plant" within the Explanation to Notification No. 110/95-Cus., enabling concessional customs duty. The reasoning focused on the notification's own language, read independently from the EXIM Policy, and on the functional use of the goods in rendering hospitality services. The majority and third member viewed the hotel as a service-producing entity and held that flooring and cladding materials could form part of plant in that context. One member dissented, applying strict construction and excluding marble slabs from plant.

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Issues: Whether marble slabs imported for a five-star hotel under an EPCG licence fell within the term "plant" in the Explanation to Notification No. 110/95-Cus. so as to qualify for concessional customs duty.

Analysis: The notification granted concessional duty under Section 25(1) of the Customs Act, 1962 for capital goods, including plant required for rendering services. The dispute turned on the meaning of "plant" in the notification, not merely on the breadth of the EXIM Policy. The majority held that the notification and the policy had to be read independently for customs exemption, and that the definition in the notification was narrower than the policy definition. The dissent and the third member's reasoning treated the hotel building as a service-producing entity, held that marble slabs used for flooring and cladding formed part of the plant in that context, and relied on the functional use of the goods in rendering hospitality services. The broader object of the scheme and the imported goods' use in the hotel were treated as relevant in construing the term.

Conclusion: Marble slabs imported for use in the hotel were held to fall within the term "plant" in the Explanation to Notification No. 110/95-Cus., and the exemption was allowed.

Dissenting Opinion: One member held that the definition in the exemption notification had to be construed strictly, that marble slabs did not constitute plant, and that the appeals should be dismissed.

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