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Issues:
Whether window clearing equipment imported by the respondents for hotel maintenance qualifies for duty concession under Notification No. 28/97-Cus. Analysis: The appeal involved a dispute over whether the window clearing equipment imported by the respondents for hotel upkeep could benefit from a duty concession under Notification No. 28/97-Cus. The adjudicating authority initially denied the benefit, stating that the equipment did not directly serve customers and thus did not qualify as 'capital goods.' However, the Commissioner overturned this decision, emphasizing that the equipment was necessary for maintaining a high standard of cleanliness crucial for attracting customers. The Commissioner highlighted that the definition of 'capital goods' in the notification did not explicitly require direct customer service. The Appellate Authority also supported this interpretation, referencing the Export Import Policy definition and concluding that the equipment for the service sector should be included as capital goods. The Revenue challenged the Commissioner's decision, arguing that the imported goods must directly serve customers to be covered by the notification. They contended that the Commissioner's reliance on the Import Export Policy's definition of 'capital goods' was incorrect as the notification itself defined the term. During the hearing, references were made to a previous case where marble used in a hotel was considered part of a 'plant' entitled to exemption, emphasizing the importance of interpreting definitions to support units contributing to foreign exchange earnings. Upon review, the Tribunal found that the window cleaning equipment was indeed essential for maintaining the hotel and contributed to the services offered by the establishment. The Tribunal agreed with the Commissioner's assessment that services provided by a hotel extended beyond food catering, encompassing the overall cleanliness and ambiance crucial for customer satisfaction. Therefore, the Tribunal upheld the Commissioner's decision, stating that the equipment fell within the definition of 'capital goods' as required for rendering services, even if the service provision was indirect. Consequently, the Revenue's appeal was dismissed for lack of merit.
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