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Issues Involved:
1. Eligibility of Distance Measuring Equipment (DME) for exemption under Notification No. 284/76. 2. Classification of DME under Chapter 85.15 or 90.14. Issue-wise Detailed Analysis: 1. Eligibility of Distance Measuring Equipment (DME) for exemption under Notification No. 284/76: The appellants imported 46 boxes of DME and sought a concessional rate of duty under Notification No. 284/76. They argued that the authorities misread the notification, incorrectly applying clause 1 instead of clause 2. Clause 2 pertains to "Apparatus for wireless reception incorporated in a single unit with transmitting apparatus and components thereof." The appellants contended that DME fits this description as it functions on the principle of a wireless transmitter and receiver. They supported their claim with references from the McGraw-Hill Encyclopedia of Science & Technology and the New Encyclopedia Britannica, which describe DME as a system involving the transmission and reception of pulses to measure distance. The respondent argued that clause 2 applies only to simple receiving and transmitting equipment incorporated in a single unit, emphasizing that the notification is intended for wireless apparatus, not radar equipment like DME. The judgment concluded that DME, primarily a navigation system, does not qualify for exemption under clause 2 of the notification. Despite its design based on wireless transmitting and receiving principles, DME's primary function is to determine the position of an aircraft, not to serve as a wireless reception apparatus incorporated in a single unit with transmitting apparatus. Therefore, the appellants are not entitled to the benefit of the notification. 2. Classification of DME under Chapter 85.15 or 90.14: The lower authorities did not consider the classification of DME under Chapter 85.15 or 90.14. The appellants initially sought classification under Heading 85.15, which covers various types of radio and radar apparatus, but the Customs authorities classified it under Heading 85.18/27-1. The judgment noted that the appellants had not explicitly raised the issue of classification under Heading 90.14 as Navigational Instruments in their grounds of appeal or prayer column. Instead, they focused on seeking concessional duty under exemption Notification No. 284/76 under Heading 85. The judgment directed the Collector to reconsider the classification of DME under Chapter 85.15 or 90.14, as the lower authorities had not addressed this issue. The appeal was remanded to the Collector for proper determination of the classification. Separate Judgments Delivered: The judgment by S.V. Maruthi, Member (J), concluded that the appellants are not entitled to the exemption under Notification No. 284/76 and directed the Collector to reconsider the classification of DME. S.L. Peeran, in a separate judgment, agreed with the conclusion that the notification does not apply but added that the appellants had not sought classification under Heading 90.14 and had accepted classification under Chapter 85. Therefore, he found no need for a remand on this ground. However, in accordance with the majority opinion, the matter was remanded to the Collector.
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