Exemption for manufacturing tools extended to machine tools used for guided weapons, as tariff chapter classification did not control.

An exemption notification allowing duty relief for "tools" used in manufacturing guided weapons was interpreted to include imported grinding and polishing machine tools classifiable under Heading 84.60. The Tribunal held that the term "tools" was not confined to Chapter 82 items, and there was nothing in the notification to exclude machine tools merely because they fell under a different tariff chapter. As the goods were used in the manufacture of guided weapons, the exemption applied and denial of customs duty relief was set aside in favour of the assessee.

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Issues: Whether the imported grinding and polishing machine, classified under Heading 84.60, was covered by the expression "tools" in Serial No. 5(v) of Notification No. 206/76-Cus. and entitled to exemption from customs duty when used in the manufacture of guided weapons.

Analysis: The imported item was accepted as a machine tool under Heading 84.60, and both the adjudicating authority and the appellate authority had described it as a grinding and polishing tool. The Tribunal held that there was no material to confine the word "tools" in the notification only to Chapter 82 items, and nothing in the notification justified excluding machine tools covered by Chapter 84. Since the goods were used in the manufacture of guided weapons, the exemption notification had to be applied to the imported machine tools as well.

Conclusion: The imported machine tools were held to fall within the scope of the notification and the denial of exemption was set aside, in favour of the assessee.

Final Conclusion: The appeal succeeded and the customs duty exemption was allowed for the imported goods used in the manufacture of guided weapons.

Ratio Decidendi: Where an exemption notification grants benefit to "tools" for manufacture of specified goods, machine tools used for that manufacture cannot be excluded merely because they are classifiable under a different tariff chapter, if the notification does not expressly so limit the term.

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