Customs exemption for modernisation imports denied where equipment was not required for initial setting up or manufacture of new furnaces.

Imported equipment used to modernise already installed calcium carbide furnaces did not qualify for exemption under Notification No. 155/86-Cus. because the concession applied only to parts required for initial setting up, assembly or manufacture of the specified article. The furnaces were already in operation, and the import was intended to replace and supplement certain parts while retaining serviceable existing components and adding indigenous parts. That modernisation was not treated as initial setting up or as the assembly or manufacture of a new furnace, so the exemption claim failed.

---

---

Issues: Whether imported equipment used for modernisation of already existing calcium carbide furnaces qualified for exemption under Notification No. 155/86-Cus. as parts required for initial setting up, assembly or manufacture of the specified article.

Analysis: The notification extended exemption only to parts required for initial setting up or for the assembly or manufacture of the specified article. The furnaces were already installed and the import was meant to modernise them by replacing and supplementing certain parts, while retaining serviceable existing parts and adding indigenous components. Such modernisation did not amount to initial setting up, assembly or manufacture of a new furnace, and the equipment imported was not shown to be required for those purposes.

Conclusion: The imported goods were not eligible for exemption under Notification No. 155/86-Cus., and the claim failed.

---