1993 (10) TMI 156 - AT - Customs

Summary

Issues Involved:
1. Eligibility for the benefit of Notification No. 125/86-Cus.
2. Classification of imported goods as "multi-layer co-extruding machine."
3. Interpretation of technical terms and trade parlance.
4. Applicability of Section and Chapter Notes in interpreting notifications.
5. Relevance of expert opinions and technical literature.

Detailed Analysis:

1. Eligibility for the benefit of Notification No. 125/86-Cus:
The core issue in the appeal was whether the imported goods, described as a "multi-layer (5 layers) co-extrusion machine and spare parts thereof," qualify for the benefit under S. No. 32 of Notification No. 125/86-Cus., dated 17-2-1986. The Collector (Appeals) had allowed this benefit, stating that the imported sub-assemblies or parts were essential for the 3-layer blown film line and, except for the die-head, all parts were specially designed for the system. The parts were not of any material use in isolation and collectively performed the function of a multi-layer co-extruding machine, thus qualifying under the notification.

2. Classification of imported goods as "multi-layer co-extruding machine":
The revenue argued that the benefit of the notification could be granted only to an extruder and not to an extruder plant. They contended that the machinery set should be classified as per Section and Chapter Notes, but these notes do not apply when interpreting the notification. The revenue cited several rulings to support their argument that the entire plant did not fit the description of an extruding machine as per the notification. However, the Tribunal found that the entire equipment imported was required for the production and manufacture of multi-layer co-extruding machine, thus supporting the classification under the notification.

3. Interpretation of technical terms and trade parlance:
The revenue emphasized the definitions of "extruder" and "extrusion" from various dictionaries to argue that the entire plant was excluded from the notification's benefit. They argued that the term "extruder" should be strictly understood and applied. However, the Tribunal disagreed, stating that the technical and trade understanding of the term "machine" includes a whole lot of interconnected components forming an integrated plant. The Tribunal noted that the quotations from suppliers and the technical literature supported the view that the entire equipment was necessary to produce multi-layer plastic film, thus fitting the notification's description.

4. Applicability of Section and Chapter Notes in interpreting notifications:
The revenue argued that the Section Note definition of "machinery" could not be imported for interpreting the terms of the notification. However, the Tribunal referred to Section Note 5 of Section XVI, which defines "machine" to include plant, equipment, apparatus, or appliance, and held that this definition was applicable. The Tribunal also referred to Section 20 of the General Clauses Act, which states that words used in a notification should have the same meaning as given in the statute. Thus, the Tribunal concluded that the term "machine" in the notification includes the entire plant.

5. Relevance of expert opinions and technical literature:
The Tribunal considered expert opinions and technical literature, which stated that the entire equipment, including the cooling ring, take-off system, winder, treater, guide, and slitting mechanism, constituted a complete and indivisible unit for producing multi-layer packaging film. The experts opined that these parts were essential for the functioning of the machine and could not be considered accessories. The Tribunal found these opinions and literature persuasive, supporting the view that the imported goods fit the notification's description.

Conclusion:
The appeal was dismissed, and the order of the Collector (Appeals) was confirmed. The Tribunal held that the imported goods, described as a multi-layer co-extruding machine, qualified for the benefit under Notification No. 125/86-Cus. The Tribunal's decision was based on the integrated nature of the equipment, the technical and trade understanding of the term "machine," and the expert opinions and technical literature provided.