2007 (3) TMI 536 - AT - Customs

Summary

Issues:
1. Classification of imported machinery as computerized pattern makers.
2. Eligibility for customs duty exemption under Notification No. 21/2002-Cus.
3. Dispute regarding whether the imported machinery is an independent machine or an accessory of a loom.

Issue 1: Classification of imported machinery as computerized pattern makers
The case involved a dispute over the classification of imported machinery as computerized pattern makers. The appellants claimed the machinery imported were computerized pattern makers, while the assessing officers classified them as accessories of a loom. The lower authority held that the imported machinery were parts of the main machinery, a loom, and not capable of making patterns independently. However, the appellants argued that the machinery fit the features of a computerized pattern maker as per expert opinion and technical literature.

Issue 2: Eligibility for customs duty exemption under Notification No. 21/2002-Cus
The key issue was whether the imported machinery qualified for the benefit of exemption under Sl. No. 251 of Notification No. 21/2002-Cus. The appellants contended that the machinery should be considered as pattern makers eligible for the concessional rate of duty at 5%, irrespective of their classification. The tribunal analyzed the description of the machinery in the supplier invoice and related catalog, concluding that the machinery imported were indeed pattern makers used in the textile industry, thus eligible for the benefit under the notification.

Issue 3: Dispute over machine's independence as an accessory of a loom
The dispute centered around whether the imported machinery was an independent machine or an accessory of a loom. The revenue argued that the imported item was not an independent machine capable of pattern making on its own, as the loom performed the pattern making function. However, the appellants cited technical literature to support their claim that the machinery performed the functions of a computerized pattern maker as specified. The tribunal upheld the Commissioner's detailed analysis, noting that the machinery was commercially understood as pattern makers and not parts of a weaving machine, thus rejecting the revenue's appeal.

In conclusion, the tribunal upheld the order setting aside the original decision, allowing the appeal filed by the appellants, and granting them consequential relief. The judgment emphasized the importance of considering the commercial understanding and technical aspects of the imported machinery in determining their classification and eligibility for customs duty exemption.