2001 (5) TMI 313 - AT - Central Excise

Tribunal denies Customs duty exemption for washing machine; Appeal dismissed for lacking merit

The Tribunal upheld the impugned order, denying the benefit of Notification No. 49/95 to the appellants regarding the classification of a horizontal ... Classification Issues:Classification of imported goods for Customs duty and countervailing duty under specific sub-headings, Benefit of Notification No. 49/95, Interpretation of entry No. 17-A of the Notification.Classification of Imported Goods:The appeal concerned the classification of a horizontal washing and drying machine imported by the appellants. The Assistant Commissioner classified the machine under sub-heading 8479.89 for Customs duty and sub-heading 8479.10 for countervailing duty, denying the benefit of Notification No. 49/95. The Commissioner (Appeals) upheld this classification, leading to the appeal before the Tribunal.Benefit of Notification No. 49/95:The appellants claimed the benefit of Notification No. 49/95, stating that the imported machine was covered by Entry 17-A of the Notification, intended for production of goods. However, the authorities denied this benefit, ruling that the machine was not meant for production but for washing and drying glass. The Tribunal analyzed the relevant portion of the notification and entry 17-A to determine the applicability of the exemption.Interpretation of Entry No. 17-A:The appellants argued that the machine should be considered for production of goods based on a liberal interpretation of 'production' and 'manufacture.' They relied on a Supreme Court judgment stating that designing is part of the manufacturing process. However, the Tribunal emphasized the strict interpretation of exemption notifications as established by previous court decisions. It concluded that the imported machine, used for washing and drying glass after manufacture, did not qualify as machinery meant for production of commodities under entry 17-A. The Tribunal rejected the argument that washing and drying were integral to manufacturing, emphasizing that the machine did not directly contribute to the production process.Conclusion:The Tribunal upheld the impugned order, denying the benefit of the notification to the appellants. It emphasized that the machine's purpose was not for production but for post-manufacturing processes. The Tribunal rejected the argument for a liberal interpretation of the notification, maintaining that the machine did not fall within the scope of entry 17-A. The appeal was dismissed as lacking merit, affirming the validity of the Commissioner (Appeals) order.