2016 (2) TMI 54 - AT - Customs

Claim of exemption on import of CNC based Laser Drilling machine - benefit of Notification No. 159/86-Cus dated 01/03/86. - After examination of machine and visit to factory premises it was found that the said machine is Laser system for diamond processing (sawing, kerfing and drilling) based on CNC. - Held that - the expression sawing machines had been used without any qualification. There is no dispute that the goods were imported for the purposes as specified in the notification. Other condition subject to which the benefit of concessional rate of duty was available and had also been fulfilled. - the notification covers the machine imported by the appellants. - appellant succeeds on both counts. The appeal is allowed - Decided in favor of assessee.

Summary

Issues:
- Interpretation of OGL benefit for CNC based Laser Drilling machine
- Interpretation of Notification No. 159/86-Cus regarding exemption for ultrasonic or laser drilling machine

Analysis:
1. The appellant imported a CNC based Laser Drilling machine claiming benefits under OGL Appendix 6, list 1, item No. 95 and Notification No. 159/86-Cus. The Commissioner denied the benefits, leading to the appeal. The appellant argued that the machine is covered under OGL as per a clarificatory letter from DGFT regarding a similar machine. The Tribunal noted that the functionality of the imported machine matches the one in the letter, emphasizing that laser operation involves drilling, sawing, etc. Thus, the machine qualifies for OGL benefits as per the DGFT letter, rejecting the objection based on Exim policy.

2. The issue regarding Notification No. 159/86-Cus centered on whether the exemption for "ultrasonic or laser drilling machine" covers the CNC based machine imported by the appellant. The argument against the exemption was that the notification did not specifically mention CNC machines. However, the Tribunal held that the generic term "ultrasonic or laser drilling machine" encompasses all variants, unlike the specific entry for CNC machines in a different part of the notification. Citing a previous Tribunal decision, the Tribunal concluded that generic descriptions cover all variants, thus the notification applies to the imported machine.

3. The Collector of Customs (Appeals) previously considered modern technology and classified laser Diamond Sawing Machines as Sawing Machines, granting them exemption under Notification No. 159/86-Cus. The Tribunal upheld the Collector's decision, finding no grounds to interfere. The Tribunal applied the principle that generic descriptions cover all variants, affirming that the notification covers the machine imported by the appellant. Consequently, the Tribunal allowed the appeal, ruling in favor of the appellant on both counts. The appeals were rejected based on these findings.