1990 (2) TMI 166 - AT - Central Excise

Summary

Issues:
- Interpretation of Notification 206/76 for exemption eligibility.
- Classification of imported goods as raw material or accessories.
- Consideration of goods as components or general-use items.
- Admissibility of new grounds not raised by the Asstt. Collector.

Interpretation of Notification 206/76 for exemption eligibility:
The appeal involved a dispute over the eligibility of imported goods for exemption under Notification 206/76. The Collector of Customs contended that the goods, identified as heat shrinkable sleeves, were raw material and not covered by the notification. However, the respondents argued that the goods were cable accessories, supported by a certificate from the Ministry of Defence. The Tribunal examined various documents, including purchase orders and supplier catalogues, to determine the nature of the goods. The Tribunal found that the goods were specifically ordered as cable accessories with part numbers and lengths, intended for use in cable assemblies for Defence purposes. Based on this analysis, the Tribunal concluded that the goods met the criteria for exemption under Notification 206/76, as certified by the Defence Ministry.

Classification of imported goods as raw material or accessories:
The primary issue revolved around whether the heat shrinkable sleeves should be classified as raw material or accessories. The Asstt. Collector initially categorized the goods as raw material due to their running length. However, the Tribunal, upon reviewing the evidence, found that the goods were specifically ordered as cable accessories with defined part numbers and lengths. The Tribunal emphasized that the goods were intended for direct use in cable assemblies without any rework, supporting their classification as accessories rather than raw material. This distinction was crucial in determining the goods' eligibility for duty exemption under the notification.

Consideration of goods as components or general-use items:
Another aspect of the case involved the consideration of whether the imported goods were components or general-use items. The department argued that even if the goods were considered components, they were of general use and not specific to Radar equipment, thus ineligible for duty-free assessment under the notification. However, the Tribunal focused on the specific purpose and usage of the goods, noting that they were ordered for Defence purposes and directly used in cable assemblies without modifications. This usage pattern, supported by documentary evidence, reinforced the Tribunal's conclusion that the goods qualified as components, particularly cable accessories, essential for Radar equipment, and hence eligible for duty exemption.

Admissibility of new grounds not raised by the Asstt. Collector:
The Tribunal addressed the issue of the department raising new grounds, such as the general-purpose use of the goods, which were not considered by the Asstt. Collector in the initial order. The Tribunal held that the department could not introduce new factual arguments at the Tribunal level, especially when not raised earlier. As the Asstt. Collector did not question the general-purpose use of the goods in the original decision, the department's attempt to raise this issue later was deemed unsustainable. The Tribunal also rejected a cross objection filed by the respondent since they were not aggrieved by any part of the impugned order. Ultimately, the Tribunal disposed of the appeal in favor of the respondents, upholding their eligibility for duty exemption under Notification 206/76 based on the specific nature and purpose of the imported goods as established by the evidence presented.