Replacement spare parts for industrial machinery may qualify as component parts for customs exemption when fitted into the equipment.

Imported refractory bricks of special shapes and quality, brought in for replacement in an industrial furnace, were treated as component parts of the furnace for purposes of the customs exemption notification. The reasoning was that a spare part fitted into machinery after manufacture to replace a defective or worn-out part becomes part of that machinery, so the bricks imported for fitment satisfied the exemption condition. The exemption under Notification No. 77/90-Customs was therefore available, the appeal succeeded, and consequential relief followed.

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Issues: Whether refractory bricks of special shapes and quality imported for replacement in an industrial furnace were entitled to the partial exemption under entry No. 1 of the Table to Notification No. 77/90-Customs.

Analysis: The exemption covered bricks for use as component parts of an industrial furnace. The reasoning applied was that a spare part fitted into machinery after manufacture to replace a defective or worn out part becomes a component of that machinery. Since the imported refractory bricks were meant for fitment in the furnace to replace damaged bricks, the condition for exemption was satisfied.

Conclusion: The exemption was available and the issue was decided in favour of the appellant.

Final Conclusion: The appeal succeeded, the adverse order was set aside, and consequential relief followed.

Ratio Decidendi: A spare part imported for replacement of a damaged component and fitted into a machine or furnace as such is to be treated as a component part for the purpose of the exemption notification.

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