Reclassification for auxiliary duty exemption denied where capital machinery was assessed on the importer's own declared classification.

Importers who secured assessment of goods as capital machinery on their own declaration, without item-wise disclosure or examination on merits, could not later seek reclassification solely to obtain auxiliary duty exemption under a different notification. The exemption depended on the goods first satisfying the tariff heading and description in the relevant notification, and that condition was not met through an alternative classification never actually assessed. The proviso to the notification could not override the legal effect of the original assessment basis. Accordingly, the differential auxiliary duty demand remained sustainable, and the alternative exemption route was unavailable.

---

---

Issues: Whether goods imported and assessed as capital machinery under Heading 8479.81 could later be reclassified for the limited purpose of auxiliary duty so as to claim the benefit of a different exemption notification, and thereby avoid the differential auxiliary duty demanded.

Analysis: The importers had declared the consignments as capital machinery for initial setting up of a manufacturing line and obtained assessment on that basis, without furnishing complete item-wise particulars, catalogues, invoices, or having the individual machines examined and assessed on merits. The exemption claimed for auxiliary duty depended upon the goods first satisfying the specified tariff headings and descriptions under the relevant notification. Since the assessment was accepted on the basis of the importers' own declaration and the goods had not been put to item-wise assessment under the alternative classification, the importers could not seek a different classification only for auxiliary duty. The proviso to the notification could not override the factual and legal consequence of the chosen assessment basis.

Conclusion: The claim for auxiliary duty exemption under the alternative notification was not available, and the differential duty demand was sustainable against the assessee.

Final Conclusion: The appeal failed because the importers, having elected assessment as capital goods without item-wise examination or complete disclosure, could not later invoke a separate exemption route for auxiliary duty on a different classification basis.

Ratio Decidendi: A party that secures assessment on a declared composite classification without item-wise scrutiny cannot subsequently demand reclassification for the limited purpose of availing a different exemption notification unless the goods were assessed on merits under that alternative classification.

---