Customs exemption for imported plant components turns on functional character, not invoice description, where goods serve initial setting up of an integrated system.

Imported goods described in customs documents as complete machines were assessed by reference to the entire record, including technical material, project correspondence and integration with the coke oven battery. The majority held that document descriptions were not conclusive where the functional character showed that only components were imported for initial setting up of an integrated system. On that basis, the goods were treated as parts and accessories eligible for concessional duty under Notification No. 155/86-Cus. dated 01.03.1986. A dissenting view held that the contemporaneous import documents showed complete machines with accessories and that exemption was unavailable.

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Issues: Whether the imported stamp charging and pushing machines and gas cleaning car were parts for initial setting up or complete machines, and whether the import qualified for exemption under Notification No. 155/86-Cus. dated 01.03.1986.

Analysis: The majority held that the description in the invoice, bill of entry and insurance documents as complete machines with accessories was not conclusive by itself. The surrounding technical material, import correspondence and project-related documents showed that only certain components were imported and that the items had no independent utility apart from their integration with the coke oven battery. The notification granted concessional duty to parts used for initial setting up or for assembling or manufacturing the specified article, and on the evidence the imported items answered that description.

Conclusion: The imported goods were treated as parts and accessories for the coke oven battery and the benefit of Notification No. 155/86-Cus. dated 01.03.1986 was held admissible, in favour of the assessee.

Dissenting Opinion: S.S. Kang, Member (Judicial), held that the contemporaneous import documents described the goods as complete machines with accessories and therefore the exemption was not available.

Ratio Decidendi: For exemption purposes, the true nature and functional character of the imported goods must be determined from the entire record, and not merely from their description in import documents; goods imported as components for initial setting up of an integrated system may qualify as parts under a concessional notification.

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