Exemption for glass fabrics does not cover finished tubes made from them; additional customs duty was upheld.

Imported tubes made from vacuum-impregnated glass cloth and reinforced with epoxy were treated as finished circuit-breaker components, not as mere glass fabrics. The exemption in Central Excise Notification No. 87/76 applied only to glass fabrics and did not extend to goods manufactured out of that material. As the goods fell under Item 22F of the Central Excise Tariff Schedule, they attracted additional duty of customs under Section 3(1) of the Customs Tariff Act, 1975. The demand was therefore sustained and the Revenue's appeal succeeded.

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Issues: Whether tubes made out of vacuum impregnated glass cloth and reinforced with epoxy, imported as finished components for circuit-breakers, were liable to additional duty of customs equivalent to central excise duty under Item 22F of the Central Excise Tariff Schedule, and whether Central Excise Notification No. 87/76 dated 16-3-1976 exempting glass fabrics could be applied to such goods.

Analysis: The goods were not mere glass fabrics but tubes manufactured out of such fabrics for use as finished circuit-breaker components. The exemption notification was confined to glass fabrics and did not extend to goods made out of glass fabrics. Since there was no dispute that the imported goods fell under Item 22F of the Central Excise Tariff Schedule, they attracted additional duty under Section 3(1) of the Customs Tariff Act, 1975.

Conclusion: The imported tubes were liable to additional duty of customs and the exemption notification did not apply; the conclusion was in favour of the Revenue.

Final Conclusion: The appeals succeeded and the orders-in-appeal were set aside, leaving the demand of additional duty intact.

Ratio Decidendi: An exemption confined to an input material does not extend to goods manufactured out of that material when the imported goods are distinct finished articles falling within the relevant tariff item.

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