Exemption notification for motor vehicle assemblies cannot cover electric storage batteries outside the specified description.

Electric storage batteries supplied to Bharat Earth Movers Limited were held not to qualify for nil rate of duty under Notification No. 1/90, because the exemption was confined to assemblies and sub-assemblies of specified motor vehicles manufactured for supply to the Defence Ministry. Compliance with Chapter X procedure was not in dispute; the decisive point was that the batteries did not answer the description of assemblies or sub-assemblies covered by the notification. The denial of exemption was therefore upheld, and the assessee's appeal was dismissed.

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Issues: Whether electric storage batteries supplied to Bharat Earth Movers Limited were entitled to nil rate of duty under Notification No. 1/90 dated 1-1-1990 as assemblies or sub-assemblies of motor vehicles.

Analysis: The notification granted exemption only to assemblies and sub-assemblies of specified motor vehicles manufactured for supply to the Defence Ministry, subject to compliance with Chapter X procedure where the goods were used outside the factory of manufacture. The record did not show any dispute regarding compliance with Chapter X. The decisive question was whether electric storage batteries answered the description of assemblies or sub-assemblies covered by the notification. The appellants did not dispute the lower authorities' finding on the nature of the goods, and the batteries were found not to be assemblies or sub-assemblies of motor vehicles in themselves.

Conclusion: The claim to exemption failed and the finding denying the benefit of Notification No. 1/90 was upheld, against the assessee.

Final Conclusion: The appeal was dismissed and the denial of exemption from duty on the electric storage batteries was sustained.

Ratio Decidendi: An exemption notification confined to assemblies and sub-assemblies of motor vehicles cannot be extended to goods that do not fall within that description.

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