Exemption for production machinery upheld where vaccine output needed further purification and bottling before market sale.

CESTAT, New Delhi held that an imported fermentor qualified for exemption under Notification No. 16/2000-Cus. because the notification covered machinery used to produce commodities under the relevant tariff sub-headings and did not require the output to be directly marketable in the exact form emerging from the machine. The fact that the vaccine produced by the fermentor required further purification and bottling before sale was held immaterial, as no such additional condition appeared in the notification. The denial of exemption was therefore unjustified, and the assessee was entitled to the benefit of the notification.

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Issues: Whether the imported fermentor was eligible for the benefit of Notification No. 16/2000-Cus. dated 01.03.2000 despite the fact that the vaccine produced by it required further purification and bottling before marketing.

Analysis: The Notification covered machinery for production of commodities classifiable under sub-heading 8479.50 or 8479.89, and it did not impose any additional condition that the commodity must be directly marketable in the form in which it emerges from the machine. The fermentor was found to be machinery for production of vaccine, and vaccine was treated as a commodity. The requirement of further purification and bottling was therefore immaterial for denying the exemption benefit, since such a condition was not found in the Notification.

Conclusion: The denial of the benefit of Notification No. 16/2000-Cus. dated 01.03.2000 was unjustified and the assessee was entitled to the exemption.

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