Trade parlance test keeps contactors outside the switch exclusion, preserving exemption under the notification.

Contactors were held not to be "switches" for purposes of Notification No. 160/86 because technical literature, HSN notes and market practice treated the two as distinct commercial commodities. Applying the trade parlance test, the tribunal noted that a contactor is a device for repeatedly opening and closing circuits, generally operating automatically, and differs in design and identity from a mechanically operated switch. The tariff scheme also recognised switches and relays as separate goods. As a result, the exclusion for switches did not apply and the assessee remained eligible for exemption; the Revenue's appeal failed.

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Issues: Whether contactors manufactured by the assessee were excluded from the benefit of Notification No. 160/86 dated 01.03.1986 as being switches, and were therefore ineligible for exemption.

Analysis: The technical literature and HSN notes treated contactors as distinct from switches. A contactor was described as a device for repeatedly opening and closing electrical circuits, generally operating automatically and differing in design and commercial identity from a mechanically operated switch. The tariff heading itself recognised switches and relays as separate examples, and market evidence showed that the two goods were known and traded as different commodities. The accepted trade parlance test, therefore, supported the conclusion that contactors could not be equated with switches merely because both perform a circuit-controlling function.

Conclusion: Contactors were not switches for the purpose of Notification No. 160/86 and were eligible for exemption; the Revenue's appeal failed.

Ratio Decidendi: Where the tariff and trade parlance treat two electrical goods as distinct commercial commodities, one cannot be brought within an exemption exclusion for the other merely because the two perform a similar function.

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