2007 (10) TMI 164 - AT - Customs

Notification No. 6/06-CE. exempts sewing machines other than those with inbuilt motors - contention that impugned sewing machine not contains an inbuilt motor is acceptable so exemption is available under notifications 21/2002 and 6/2006 - held that the motor was fitted outside and connected by v-belt and it is not inbuilt

Summary

Issues:
1. Eligibility for exemption under Notification Nos. 21/2002-Cus. and 6/2006-C.E. for industrial sewing machines.
2. Interpretation of whether sewing machines had inbuilt motors or not.

Eligibility for Exemption under Notifications:
The case involved a dispute regarding the eligibility of an importer for exemption under Notification Nos. 21/2002-Cus. and 6/2006-C.E. for industrial sewing machines. The Commissioner (Appeals) set aside the Deputy Commissioner's order and granted the exemption, stating that the machines were without inbuilt motors. The importer argued that the motors were not connected to the sewing head and could be separated, thus meeting the exemption criteria. The lower authority, however, deemed the machines as having inbuilt motors, leading to the initial denial of the exemption. The Commissioner (Appeals) accepted the importer's plea based on this distinction.

Interpretation of Inbuilt Motors:
The learned Counsel referenced a judgment of the Madras High Court, affirmed by the Apex Court, which clarified the concept of inbuilt motors. The High Court had previously ruled that if a motor is placed outside the machine and connected by a v-belt, it is not considered inbuilt. This interpretation was applied to the current case, supporting the importer's claim. The Tribunal analyzed various judgments, emphasizing that for an article to be classified as a domestic electrical appliance, it must have an electrical contrivance making it a complete unit fit for its designed service. The Tribunal concluded that the machines in question did not meet this criteria and, therefore, upheld the Commissioner (Appeals) decision to grant the exemption.

Conclusion:
After considering the arguments from both sides and the precedents cited, the Tribunal found no merit in the Revenue's appeal and rejected it. The decision was based on the interpretation of inbuilt motors and the eligibility criteria under the relevant notifications. The Tribunal's ruling aligned with the Madras High Court judgment and affirmed the importer's eligibility for the exemption. The case highlighted the importance of precise interpretations in determining eligibility for tax exemptions under specific notifications, emphasizing the need for clarity in distinguishing key technical aspects such as inbuilt motors.