Strict construction of exemption notifications limits electrical testing equipment from tariff-based exemption by implication.

Electrical noise testing equipment was analysed as a measuring-cum-checking instrument because checking bearing irregularities required prior measurement of the level of irregularity. On that basis, Heading 90.16(2) for checking instruments alone was treated as too narrow to cover an instrument with both measuring and checking functions. The commentary also explains that exemption Notification No. 394/76-Customs applied only to non-electric measuring or measuring-cum-checking instruments under Heading 90.16, so it did not extend to electrical goods classifiable under Heading 90.28. An exemption notification must be strictly construed and cannot be enlarged by reference to a tariff rate entry.

---

---

Issues: (i) Whether the imported electrical noise testing equipment was classifiable under Heading 90.16(2) as a checking instrument or under Heading 90.28(4) read with Heading 90.16(1) as assessed by the lower authorities; (ii) Whether exemption Notification No. 394/76-Customs dated 2-8-1976 was applicable to the goods.

Issue (i): Whether the imported electrical noise testing equipment was classifiable under Heading 90.16(2) as a checking instrument or under Heading 90.28(4) read with Heading 90.16(1) as assessed by the lower authorities.

Analysis: The catalogue had to be read as a whole. On that reading, the equipment was found to be a measuring-cum-checking instrument, because checking the irregularities in a bearing necessarily required prior measurement of the level of irregularities. The goods therefore possessed both measuring and checking functions. Heading 90.16(2) covered only checking instruments and could not take in an instrument that was also measuring in nature.

Conclusion: The classification adopted by the lower authorities was upheld and the plea for assessment under Heading 90.16(2) was rejected.

Issue (ii): Whether exemption Notification No. 394/76-Customs dated 2-8-1976 was applicable to the goods.

Analysis: The notification covered measuring and measuring-cum-checking instruments only when they fell under Heading 90.16, that is, the non-electrical type. The imported goods were electrical and fell under Heading 90.28, which was not specified in the notification. The tariff entry referring to the rate applicable to the non-electric counterparts could not by itself extend an exemption notification beyond its express terms. An exemption notification had to be strictly construed.

Conclusion: The exemption notification was held to be inapplicable to the goods.

Final Conclusion: The assessment made by the lower authorities was sustained and the appeal failed.

Ratio Decidendi: A tariff classification and an exemption notification must be applied according to the nature of the goods and the express scope of the notification, which cannot be extended by implication from a rate-entry reference.

---