Tariff classification governs exemption eligibility for pump parts, and further processing does not defeat Notification No. 64/86-C.E. benefit.

Castings of alloy steel and copper cleared as components for further finishing were treated as parts of power driven pumps because they had acquired the essential character of such parts and were classifiable under Heading 84.09. The exemption under Notification No. 64/86-C.E. had to be tested by the same tariff classification rules, including the interpretative and chapter notes, since the notification referred to tariff headings. On that basis, the benefit could not be denied merely because additional processing was needed before actual use; the goods were held eligible for the exemption.

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Issues: Whether castings of alloy steel and copper, cleared as components intended for further finishing before use as parts of power driven pumps, were entitled to the benefit of the exemption under Notification No. 64/86-C.E. for parts of power driven pumps classifiable under Chapter 82, 83 or 84 of the tariff.

Analysis: The exemption was linked to tariff classification, and the department itself accepted that the goods had acquired the essential character of parts of pumps and were classifiable under Heading 84.09. Once the goods were accepted as parts of pumps for tariff purposes, the same characterization applied for the notification. In construing an exemption that refers to tariff headings, the relevant classification rules, including the interpretative notes and chapter notes, must be applied. On that basis, there was no ground to deny the notification merely because further processing was required before actual use.

Conclusion: The goods were held eligible for the benefit of Notification No. 64/86-C.E. and the denial of exemption was set aside.

Ratio Decidendi: Where an exemption notification grants benefit by reference to tariff classification, the goods must be assessed according to the tariff rules, interpretative notes, and chapter notes, and if they are classifiable as parts of the specified machinery, the notification cannot be denied solely because further processing is needed before use.

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