2017 (1) TMI 914 - AT - Customs

Benefit of concessional rate of duty under N/N.21/2002-Cus - spinnerets - denial on the ground that the said products are not equipment - Held that - On plain reading of the equipment mentioned in list 45, we find that the said list talks about spinning equipment which are used for drawing of synthetic fibre and used in the fibre plant. The definition as can be seen from the Words & Phrases of Central Excise, Customs & Service Tax by S.B. Sarkar, is leaving no doubt in our mind that spinneret is used as an equipment which is a disk with fine holes through which molten polymer or a solution of the polymer is forced, to form the continuous filaments of a manmade fibre. In the case of Gwalior Sugar Co. Ltd. 1991 (12) TMI 144 - CEGAT, NEW DELHI , the Special Bench of the Tribunal held that filter bags used for filtering of cane juice in a filtration equipment in the process of manufacturing of sugar, is an equipment for which the benefit of N/N.217/86 can be extended. The appellant is eligible for the benefit of N/N. 21/2002-Cus - appeal allowed - decided in favor of appellant.

Summary

Issues:
Whether the appellant is eligible for the benefit of Notification No.21/2002-Cus. for the concessional rate of duty on the products "spinnerets".

Analysis:
The appeal was filed against order-in-appeal No. 52(Gr.VA)/2006(JNCH) dated 28.4.2006, where the adjudicating authority denied the benefit of the notification on the grounds that the products are not considered equipment. The first appellate authority also upheld this decision. The appellant argued that the products imported are machinery for the synthetic fibre plant, specifically spinnerets, which are essential spinning equipment. The notification allows a concessional rate of duty for machinery or equipment for use in manmade or synthetic fibre or yarn industries. The Tribunal analyzed the definition of spinneret and concluded that it falls under the category of equipment specified in the notification.

The Tribunal reviewed the case records and submissions, emphasizing that the benefit of reduced duty was claimed based on spinnerets being considered equipment specified in the relevant list. By referring to the definition of spinneret as a disk with fine holes used to form continuous filaments of manmade fibre, the Tribunal found that spinnerets indeed qualify as equipment for the concessional duty. The Tribunal cited a previous judgment regarding the definition of equipment in a similar context, where it was established that items like spinnerets could be classified as equipment for the purpose of duty benefits.

Conclusively, the Tribunal held that the appellant is eligible for the benefit of Notification No.21/2002-Cus (serial No.425) as spinnerets are considered equipment under the relevant list. The impugned order was set aside, and the appeal was allowed on the basis of the definition and classification of spinnerets as essential equipment for the synthetic fibre plant, falling under the concessional duty criteria.

(Pronounced in Court on 29.12.2016)