Exemption for electronic capacitors upheld where expert evidence on raw material and process supported the product classification.

Expert evidence on the manufacturing process and raw material showed that the capacitors were made from metalised polypropylene films of less than 12 micrones thickness, the material used for electronic capacitors. On that basis, the goods answered the description of electronic capacitors under Notification No. 211/84, and the exemption could not be denied merely on a contrary statement from one partner. The contrary classification finding was unsustainable because the expert report and unit inspection supported the appellant's claim. The duty demand and penalty therefore could not survive, and the impugned order was set aside with consequential relief.

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Issues: Whether the capacitors manufactured by the appellant were electronic capacitors so as to qualify for the exemption under Notification No. 211/84.

Analysis: The exemption depended on the nature of the product and the raw material used. The expert report stated that metalised polypropylene films of less than 12 micrones thickness were used in the manufacture of electronic capacitors, that the appellant used such material, and that the capacitors made from it were electronic in nature. The department relied on a contrary statement recorded from one partner, but the expert opinion and the manufacturing process observed in the unit supported the appellant's claim. On that evidence, the finding that the goods were not electronic capacitors could not be sustained.

Conclusion: The capacitors were held to be electronic capacitors, and the appellant was entitled to the exemption.

Final Conclusion: The duty demand and penalty could not survive, and the impugned order was set aside with consequential relief.

Ratio Decidendi: Where the evidence, particularly expert evidence on the manufacturing process and raw material, establishes that the goods answer the description in the exemption notification, the exemption cannot be denied on a contrary unsupported classification finding.

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