Classification of CKD clearance depends on the nature of supply; a complete stern drier remained dutiable as a complete article.

Clearance of a stern drier in parts or CKD form was not treated as clearance of parts of conveyors where the buyer had ordered the complete stern drier and duty had already been paid on the complete article. The fact that the goods were moved in parts did not change the nature of the supply. On the admitted facts, the revenue's attempt to classify the clearance as parts of conveyors was rejected, and the duty demand on that basis was held unsustainable.

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Issues: Whether the clearance of a stern drier in parts or in CKD condition was liable to duty as parts of conveyors, or whether it was to be treated as clearance of the complete stern drier on which appropriate duty had already been paid.

Analysis: The order placed by the buyer was for supply of the complete stern drier and not for supply of parts. The record showed that the stern drier was cleared on payment of the duty applicable to the complete article, and the fact that it was moved in parts did not alter the nature of the supply. On the admitted facts, the revenue's case that the clearance was only of parts of conveyors was not accepted.

Conclusion: The demand on the basis that the goods were cleared as parts of conveyors was not sustainable. The issue was decided in favour of the assessee and against the revenue.

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