Strict construction of ship exemption notifications: fabrics for fire fighting suits were not goods for construction or fitment to ships.

Aluminised glass fibre fabrics imported for manufacture of fire fighting suits did not qualify for exemption under Notifications No. 195/76-Cus. and 291/84-Cus. because the notifications were confined to goods required for construction of or fitment to ships of the Indian Navy or Coast Guard. The fabrics were only to be converted into personal protective suits in the importer's factory, and such suits, kept on board for emergency use, did not form a physical part of the ship or amount to fitment. Applying strict construction to exemption notifications, the claim failed and the Revenue's objection succeeded.

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Issues: Whether aluminised glass fibre fabrics imported for manufacture of fire fighting suits were eligible for exemption under Notification No. 195/76-Cus. and Notification No. 291/84-Cus. as goods required for construction of or fitment to ships.

Analysis: The exemption notifications were confined to goods required for construction of or fitment to ships of the Indian Navy or Coast Guard. The imported fabrics were brought in running length and were only to be converted into fire fighting suits in the importer's factory. Such suits were personal protective equipment, kept on the ship for emergency use, and did not form a physical part of the ship or satisfy the concept of fitment. Exemption notifications had to be construed strictly, and the goods did not meet the prescribed conditions.

Conclusion: The fabrics were not eligible for exemption under either notification, and the Revenue's objection succeeded.

Final Conclusion: The exemption claim failed because the imported material was not goods required for construction of or fitment to ships, so the Revenue's appeal was allowed and the impugned appellate order was set aside.

Ratio Decidendi: For exemption limited to goods required for construction of or fitment to ships, an item must bear a direct physical connection with the ship and cannot qualify merely because it enhances safety or is carried on board for emergency use; exemption notifications must be strictly construed.

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