1996 (11) TMI 146 - AT - Customs

Summary

Issues Involved:
1. Eligibility for benefit under Notification No. 153/86-Cus.
2. Interpretation of "machinery" in the context of the Notification.
3. Classification of imported machines under sub-heading 8479.89 of CTA, 1975.
4. Applicability of precedents and previous judgments.

Detailed Analysis:

1. Eligibility for Benefit under Notification No. 153/86-Cus.
The appellants sought the benefit of Notification No. 153/86-Cus., dated 1-3-1986, for the import of three machines: Paste Pouring Machine, Bobbin Insertion Machine, and Capping Machine. The Collector of Customs (Appeals) denied this benefit, granting it only for the Battery Can Trimming Machine. The appellants argued that the Notification does not specify that each machine must produce a commodity, but rather that a series of machines can collectively produce a commodity. The Collector held that each machine has an individual function and must be assessed separately, thus denying the benefit.

2. Interpretation of "Machinery" in the Context of the Notification
The appellants contended that the term "machinery" in the Notification refers to a set of machines used collectively for producing a commodity, in this case, Dry Battery Cells. They argued that the Notification's intent was not to restrict benefits to a single machine but to machinery as a whole. The Revenue countered that the Notification refers to a single machine producing a commodity and not a series of machines working together. The Tribunal agreed with the Revenue, stating that the interpretation of "machinery" should be confined to a single machine capable of producing a commodity by itself.

3. Classification of Imported Machines under Sub-heading 8479.89 of CTA, 1975
The machines were classified under sub-heading 8479.89 of the Customs Tariff Act (CTA), 1975, as machines and mechanical appliances having individual functions, not specified or included elsewhere in the Chapter. The Tribunal noted that each machine performs an independent function within the manufacturing process of Dry Battery Cells but does not produce a commodity by itself. Therefore, the classification under sub-heading 8479.89 was deemed appropriate.

4. Applicability of Precedents and Previous Judgments
The appellants relied on the judgment in Collector of Customs v. Zipper (India) Products, which supported the classification of machines performing individual functions but ultimately producing a commodity. The Tribunal distinguished this case, noting that the issue at hand was the benefit of an exemption Notification, not classification. The Tribunal referred to other precedents, such as National Small Industries v. Collector of Customs, which held that a machine must produce a commodity by itself to qualify for the benefit. The Tribunal also cited the judgment in Collector of Customs v. Fit Tight Nuts & Bolts Ltd., which emphasized strict interpretation of Notifications, concluding that the benefit applies only to machines capable of producing a complete commodity independently.

Conclusion:
The Tribunal upheld the lower authorities' decision to deny the benefit of Notification No. 153/86-Cus. to the three machines in question, affirming that each machine must produce a commodity by itself to qualify for the benefit. The appeal was dismissed, and the interpretation that only individual machines producing a commodity are eligible for the Notification's benefit was reinforced.