Motor vehicle parts exemption covers rough steel forgings when they have attained the character of parts despite further machining.

Steel rough forgings classifiable under Chapter 73 were treated as motor vehicle parts for exemption under Notification No. 239/86-C.E. because they had reached the character of such parts, even though further machining was still required before final fitment. The Tribunal noted that the Department had not substantiated its objection that the goods were not usable as parts in their present form, and it accepted that the exemption could not be denied merely because additional processing remained. The exemption was therefore available to the goods, and the denial of benefit was not justified.

---

---

Issues: Whether steel forgings classified under Chapter 73 and supplied for use in motor vehicle manufacture were entitled to exemption under Notification No. 239/86-C.E. as motor vehicle parts.

Analysis: The relevant notification exempted motor vehicle parts falling under Chapter 73. The goods were rough forgings that had reached a stage of manufacture where, after further machining, they would become motor vehicle parts. The Department's objection that the items were not directly usable as parts was not substantiated. The Tribunal found no infirmity in the Commissioner (Appeals)'s view that the notification covered such goods and that exemption could not be denied merely because further processing was required.

Conclusion: The exemption under Notification No. 239/86-C.E. was available and the denial of benefit was not justified.

Final Conclusion: The departmental appeal failed and the assessee retained the benefit of exemption for the disputed forgings.

Ratio Decidendi: Where an exemption notification expressly covers motor vehicle parts falling under a specified tariff chapter, goods that have attained the character of such parts and are classifiable under that chapter cannot be denied the exemption merely because they require further machining before final fitment.

---