TaxTMI 
TaxTMI 
2001 (3) TMI 94
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....ure one lakh ton of Cold Rolled Closed Annealed (CRCA) and Tin Mill Black Plate (TNBP) Coils per year under a licence issued by the Ministry of Commerce, Government of India on 30-3-1981. The said Ministry by a letter dated 2-7-1982 approved the proposal of the appellant for import into the KFTZ of second-hand machinery for the purpose of the manufacture of the CRCA and TMBP under certain conditions which included that the imported machineries should not be over 10 years old and it should have a residual life of at least 5 years. Based on the said permission, the appellant imported between the period 1983 and 1987 second hand machineries as capital goods for which they had filed as many as 17 Bills of Entry and claimed the benefit of Notifi....
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....hat the ceramic wool in the same had to be replaced with new wool because the old ceramic wool had outlived its utility. 4.The Collector as per his order dated 31-3-1993 substantially dropped the charges levelled in the show cause notice and came to the conclusion that the machineries imported viewed as a whole was substantially old and that the Thyristor Converter was an essential part of the Temper Mill, and except for this particular part all other components of the Temper Mill were second-hand. He was also of the opinion, that the ceramic wool which was a part of the annealing furnace was a periodically replaceable part, hence, same cannot be individually treated as a new machinery, therefore, was of the opinion that the import in qu....
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....p; Temper Mills; (b) Reversing Cold Reduction Mill; (c) Continuous Pickle line; (d) Bright Annealing Furnace Facility; and (e) Reconditioned second-hand cylindrical roll grinding mines. 8.This permission does not indicate that each and every part of the above machinery should necessarily be second-hand. 9.It is seen from the order of the Collector that after examining the machinery in question, he came to the conclusion that the import of Thyristor Converter and ceramic wool was as a small part of the larger machinery permitted to be imported for the manufacture of 1 lakh tons ....
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....he notification because the notification in question permits the importation of certain second-hand machinery to be used in the manufacture of goods meant only for export in units situated in the defined Zones. The object and purpose of such exemption notification is to encourage exports by granting exemption from customs duty on materials that are required to be imported for the purpose of manufacture of resultant products, which are to be exclusively exported. The words of the notification have to be construed keeping in view the said object and purpose of the exemption. This is also the view taken by this Court in the case of Oblum Electrical Industries Pvt. Ltd., Hyderabad v. Collector of Customs, Bombay - 1997 (94) E.L.T. 449 (S.C.) = ....
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....ed in connection with the production of goods for export". 12.Coming to the factual matrix of the case, we see while the Collector came to the conclusion on facts that both the Thyristor Converter and the ceramic wool were only small parts of the larger machinery permitted to be imported, the tribunal proceeded on a technical ground that since these parts were new it required special permission of the Board without examining whether the object of the import could have been achieved by either not importing the said parts or by importing old Thyristor converter or used ceramic wool. As a matter of fact, if the tribunal had come to the conclusion that either the Thyristor converter or the ceramic wool were not necessary parts of the Temper ....
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....e M.G. system, a substitute Thyristor control system is only alternative and imperative". This observation in the Inspection Report relied upon by the Collector clearly shows that the Temper Mill would be incomplete and be of no use without the import of Thyristor control system. Therefore, the finding of the tribunal that the report of M/s. Dona Electricals does not support the view taken by the Collector also cannot be sustained. 14.In regard to the import of the ceramic wool, it is to be noted that the Collector came to the conclusion that the said ceramic wool is a component which is fitted into the furnace as a periodically replaceable part and in the normal course has a life span was only five years. Therefore, in his opinion, whil....