1986 (1) TMI 225

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....appellants are entitled to exemption under Notification No. 197-Cus/76 in respect of the goods, namely. Model Houston Systems Mad Agitator Assembly consisting of Patented impeller. Housing and shaft, gear reducer and right angle drive, Explosion proof motor and Impeller shaft imported by them in the following circumstances :- (a) The appellants imported a consignment of Mud Agitator Assembly which was assessed to duty under Tariff Heading 84.59 (i) of CTA "75" at the rate of 60% plus 15%; (b) The appellants sought re-assessment of this consignment at the rate of 40% ad valorem under Notification No. 197-Cus/76 dated 2-8-1976 and without ad valorem duty under Notification No. 369-Cus/76. This claim was rejected by the Assistant Collect....

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....Mud Agitator" will be 40% ad valorem only in terms of the said Notification. 3. We have heard Shri R. Subramanian, Deputy General Manager of the appellants and Shri Gopinath, the learned SDR. On a due consideration of the matter, we are. not inclined to agree with the contention advanced by Shri R. Subramanian. Notification No. 197-Cus/76, dated 2-8-1976 reads :- "Import of goods for use in Oil/Gas Exploration. -In exercise of the powers conferred by sub-section (1) of Section 25 of the Customs Act, 1962 (52 of 1962), the Central Government, being satisfied that it is necessary in the public interest so to do, hereby exempts the articles specified in the Schedule annexed hereto and component parts of such articles, when imported ....

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....elease relief valves. 24. Bottom hole pressure and temperature recorder. 25. Tubings. 26. Bottom hole samplers." 4. As stated earlier, it is not the case of the appellants that the "Mud Agitator Assembly" is a "Mud Pump" so as to attract Item No. 3(b) of Schedule to the Notification. The specific case of the appellants is that "Mud Agitator Assembly" is an integral part of the Deep Drilling Rigs and therefore it falls under Item No. 1 of Schedule to the Notification. He further submits that in the field of onshore exploration using oil drilling rigs, the liquid mud of desired consistency and density has to be injected through drill pipe and the drill bit under high pressure to cool the drill and to carry away the rock and s....

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....i.e., Derrick, elevators etc. It is significant to note that the said Notification besides Drilling Rigs exempts specifically ":- (1) Drilling bits ; (2) Drilling equipments, namely, (a) Draw works, (b) Mud pumps, (c) Shale shakers, (d) Swivel, (e) Hook, (f) Rotary tables, (g) Crown block and travelling block, (h) Derrick : (3) Core barrels; (4) Core bits; (5) Turbo drills and turbo bits ; (6) Drilling speed testers ; (7) Blow-out preventers; (8) Formation testers; (9) Packers used in oil wells ; (10) Gas and air compressors ; (11) Desanding units; (12) Cementation units, bunkers and ancillary equipments ; (13) Well head fittings ; (14) Christmas trees; (15) Oil gas separators ; (16) High pres....