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Issues Involved:
1. Eligibility of the bran cutting machine for the benefit of Notification No. CN 49/95. 2. Interpretation of the terms "production of a commodity" versus "manufacture of a commodity." 3. Marketability and classification of coarse bran versus fine bran. Issue-wise Detailed Analysis: 1. Eligibility of the Bran Cutting Machine for the Benefit of Notification No. CN 49/95: The primary issue was whether the bran cutting machine imported by the appellant qualified for the concessional rate of duty under Notification No. CN 49/95. The authorities below had rejected this claim, stating that the machine did not fulfill the conditions stipulated in the notification, specifically that the machine must be used in the production of a commodity. The lower authority held that the machine merely reduced the size of the bran feed and did not constitute a process of manufacture that would result in a new marketable commodity. 2. Interpretation of the Terms "Production of a Commodity" Versus "Manufacture of a Commodity": The appellant argued that the notification granted benefits to machines that aid in the "production of a commodity" and did not specifically require the "manufacture of a commodity." The appellant's counsel contended that the authorities misinterpreted the notification by equating production with manufacture, which necessitates the emergence of a new marketable product. The appellant cited the Supreme Court judgment in Commissioner of Income-tax v. NC Budharaja & Company, which clarified that the term "manufacture" includes "production" and "produce." Therefore, even if the machine did not bring into existence a new marketable commodity, it still qualified under the term "production of a commodity." 3. Marketability and Classification of Coarse Bran versus Fine Bran: The appellant maintained that coarse bran was not marketable, and the fine bran produced using the imported machine was a distinct product marketed as cattle feed. They argued that the machine facilitated the production of fine bran, increasing the yield from 17% to 24% of wheat. The appellant paid sales tax on the fine bran, indicating its marketability as a separate commodity. The authorities, however, contended that both coarse and fine bran were marketable as cattle feed and that the machine did not produce a new product with a distinctive name, character, or use. Judgment Summary: The Tribunal considered the submissions and the relevant case law cited by both parties. It found that the appellant had successfully established their case for the benefit of the notification. The Tribunal noted that the classification of the machine under sub-heading 8479.89 was not disputed, and the appellant's production process involved converting wheat into various products, including fine bran. The Tribunal emphasized that the appellant marketed fine bran and paid sales tax on it, contradicting the authorities' claim that it was not a marketable product. The Tribunal referred to the Supreme Court judgment in Commissioner of Income-tax v. NC Budharaja & Company, which clarified that "manufacture" includes "production." It also cited the Tribunal's decisions in CC v. Duro Foam Industries Pvt. Ltd., Advani Oerlikon Ltd. v. CC, and CC v. McDowell, which supported the appellant's contention that the machine was used for the production of a commodity. The Tribunal concluded that the authorities' interpretation of the notification was flawed and that the appellant's machine qualified for the concessional rate of duty under Notification No. CN 49/95. The impugned order was set aside, and the appeal was allowed.
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