Machine-specific components qualify as parts for exemption when made solely for T-72 Main Battle Tanks.

Items manufactured to specific drawings and designs for T-72 Main Battle Tanks were treated as parts of the tanks because they were made solely for that machine and were not goods of general use. The exemption notification was read broadly to cover parts of Main Battle Tanks within the specified tariff chapters, and the departmental circular and the assessee's own case supported that interpretation. On that basis, the items qualified for exemption under Notification No. 164/87-C.E., and denial of the exemption was held unsustainable.

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Issues: Whether the three items manufactured for use in T-72 Main Battle Tanks qualified as "parts" of the tanks and were eligible for exemption under Notification No. 164/87-C.E. dated 10-6-1987.

Analysis: The exemption notification covered parts of Main Battle Tanks falling within specified chapters of the Schedule to the Central Excise Tariff Act, 1985, showing a wide sweep and not a restricted one. The items were manufactured to specific drawings and designs for the tanks and were not goods of general use. Applying the settled principle that an article made solely for use in a particular machine is to be treated as a part of that machine, the items answered the test of being parts of the Main Battle Tank. The clarification in the departmental circular and the view taken in the assessee's own case also supported this position.

Conclusion: The items were eligible for exemption under Notification No. 164/87-C.E. and the denial of exemption was unsustainable. The appeals succeeded in favour of the assessee.

Ratio Decidendi: An article manufactured solely and specifically for use in a particular machine or system, and not capable of general use, is to be treated as a part of that machine for the purpose of classification and exemption.

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