Sprinkler irrigation system not treated as an agricultural implement under the earlier exemption notification.

Notification No. 64/86-C.E. granted exemption only to agricultural implements and their parts for the relevant period. A complete sprinkler irrigation system, consisting of multiple components and capable of use in parks, gardens, lawns and fields, was not treated as an agricultural implement within that narrower pre-1-3-1988 exemption. The later notification extending relief to mechanical appliances used in agriculture or horticulture from 1-3-1988 supported the view that such machinery was not covered earlier. On this analysis, the sprinkler system fell outside the exemption under the earlier notification.

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Issues: Whether the sprinkler irrigation system manufactured by the assessee was an agricultural implement eligible for exemption under Notification No. 64/86-C.E. dated 10-2-1986 during the period prior to 1-3-1988.

Analysis: The exemption under Notification No. 64/86-C.E. was confined, for the relevant period, to agricultural implements and parts thereof. The goods manufactured by the assessee were described as a complete sprinkler irrigation system consisting of several components and were capable of use in parks, gardens, lawns and fields. The later notification extending exemption to mechanical appliances used in agriculture or horticulture operated only from 1-3-1988, which supported the view that the earlier notification did not cover such machinery. On the facts, the sprinkler system was not treated as an implement within the narrower pre-1988 exemption.

Conclusion: The sprinkler irrigation system was not an agricultural implement for the purpose of Notification No. 64/86-C.E. for the relevant period, and the denial of exemption was .

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