Exemption notification classification for a tool room jig boring machine upheld despite ancillary milling capability.

An imported machine described in the invoice, literature and institute certificate as a coordinate jig boring machine was held to fall within Serial No. 2 of Notification No. 40/78-Cus. for concessional duty. The interpretation of the exemption entry was not governed by Chapter Note V to Chapter 84 of the Customs Tariff Act. On the evidence, the machine was found to be a high precision tool room jig boring machine, and its ancillary milling capability did not exclude it from the notification. The impugned order was set aside, the appeal was allowed, and the assessee obtained relief on classification and refund entitlement.

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Issues: Whether the imported machine was covered by Serial No. 2 of the table annexed to Notification No. 40/78-Cus. dated 1-3-1978 as a tool room coordinate jig boring machine and entitled to concessional rate of duty.

Analysis: The machine was described in the invoice and literature as a coordinate jig boring machine and tool room precision coordinate jig boring machine. The certificate of the Central Machine Tool Institute also supported that it was a special tool room coordinate jig boring machine. The Court rejected the argument that Chapter Note V to Chapter 84 of the Customs Tariff Act governed interpretation of the notification. On the material before it, the machine was found to be a high precision jig boring machine meant for tool room use and not excluded merely because it could also perform milling operations.

Conclusion: The imported machine fell within Serial No. 2 of Notification No. 40/78-Cus. and was entitled to the concessional rate of duty.

Final Conclusion: The impugned order was set aside and the appeal was allowed, resulting in relief to the assessee on classification and refund entitlement.

Ratio Decidendi: An imported machine answering the description in the exemption notification cannot be denied the concessional rate merely because it has ancillary multi-purpose capability, where the evidence establishes that it is in substance the specified tool room jig boring machine.

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