Exemption for automotive testing equipment upheld despite other uses, where the notification did not require exclusive industry use.

Imported noise and vibration measuring and analysing equipment qualified for concessional duty under Notification No. 243/78-Cus. because it was designed for testing purposes in the automotive industry. The notification did not require exclusive use in that industry, so the equipment's ability to serve other general purposes did not defeat eligibility. The stated principle is that exemption cannot be denied merely because goods are capable of multiple applications, where the notification is satisfied by design for the specified purpose. On that basis, the denial of exemption was set aside in favour of the assessee.

---

---

Issues: Whether the imported noise and vibration measuring and analysing equipment was eligible for the benefit of Notification No. 243/78-Cus. dated 26-12-1978, although it could also be used for general purposes outside the automotive industry.

Analysis: The notification granted concessional duty to goods falling under Chapter 90 of the Customs Tariff Act designed for testing purposes in the automotive industry. The imported equipment was found to have multiple applications, but the text of the notification did not require that the goods be designed exclusively or entirely for use in that industry. The mere fact that the equipment had other uses did not negate its design for testing purposes in the automotive sector. Earlier tribunal decisions were treated as supporting the principle that exemption cannot be denied only because the machine can also perform other functions.

Conclusion: The equipment was held eligible for the notification and the denial of exemption was set aside in favour of the assessee.

Ratio Decidendi: Where an exemption notification does not require exclusive use, goods designed for the specified purpose remain eligible even if they are capable of other applications.

---