1993 (7) TMI 179 - AT - Customs

Summary

Issues:
1. Interpretation of Notification 156/86 regarding exemption to turbo-alternators.
2. Classification of imported goods under Tariff Heading 85.01 or 85.02.
3. Application of Supreme Court's judgment in Jain Engineering Co.'s case.

Analysis:
1. The case involved the interpretation of Notification 156/86 granting exemption to turbo-alternators. The original authority denied the exemption, classifying the imported goods as a complete generating set falling under Tariff Heading 85.02, not under 85.01 or 85.03 as required by the notification. The Collector of Customs (Appeals) extended the exemption to turbo-alternators, relying on a Supreme Court decision and disregarding the classification under Tariff Heading 85.01. The main issue was whether the exemption notification applied to the imported turbo-alternators.

2. The Revenue argued that the plain wording of the notification required turbo-alternators to fall under Heading 85.01 for exemption, which was not the case with the imported goods classified under Heading 85.02. They emphasized strict interpretation of exemption notifications. However, the Advocate for the Respondent contended that turbo-alternators, as per commercial understanding, are alternators with turbines, qualifying for the exemption. The Tribunal noted that the definition of turbo-alternator implied a combination of alternator and turbine, justifying the application of the exemption despite the classification under Heading 85.01.

3. The Tribunal referred to the Supreme Court's judgment in Jain Engineering Co.'s case, where the Court ignored a specific Tariff Heading in an exemption notification to give effect to the clear intention of the notification. Similarly, in this case, the Tribunal disregarded the classification under Tariff Heading 85.01 to uphold the exemption for turbo-alternators under Notification 156/86. By aligning with the Supreme Court's approach, the Tribunal rejected the Revenue's appeal and dismissed the cross-objections due to non-maintenance on the classification of technical drawings and manuals.

In conclusion, the Tribunal ruled in favor of the Respondent, upholding the exemption for the imported turbo-alternators despite the classification ambiguity under Tariff Heading 85.01. The decision was based on the commercial understanding of turbo-alternators and the need to interpret exemption notifications in line with their intended purpose, as established in relevant legal precedents.