Special design test governs exemption classification: a coal-fired boiler remained ineligible despite alternative fuel capability.

A coal-fired boiler was held not to qualify as an Agricultural and Municipal Waste Conversion Device Producing Energy because the record did not show it was specially designed for use on agricultural or municipal waste. Its mere capability of also operating on such waste or other non-conventional fuels did not alter its tariff classification where its design remained for coal firing. The exemption under Notification No. 120/81-C.E. was therefore denied, and the Revenue's classification view was upheld. The controlling test applied was special design and intended use; alternative capability alone was insufficient to secure exemption eligibility.

---

---

Issues: (i) Whether the coal fired boiler was classifiable as an Agricultural and Municipal Waste Conversion Device Producing Energy eligible for exemption under Notification No. 120/81-C.E. dated 15-5-1981.

Analysis: The goods were cleared as coal fired boilers and the record did not show that they were specially designed for operating on agricultural or municipal waste. The mere fact that the boiler could also use agricultural and municipal waste or other non-conventional fuels did not alter its classification where its design was for coal firing. A device specially designed for a particular use does not cease to remain so because it can also be used for some other purpose.

Conclusion: The boiler was not entitled to exemption under Notification No. 120/81-C.E. and the Revenue's view on classification was correct.

Final Conclusion: The exemption claim failed and the Revenue's appeal succeeded by restoration of the original adjudication.

Ratio Decidendi: For exemption classification, the controlling test is the special design and intended use of the goods, and mere capability of alternative use does not change their tariff classification or exemption eligibility.

---