1997 (3) TMI 182 - AT - Customs

Summary

Issues:
1. Interpretation of Notification No. 58/87 for concessional benefit.
2. Determination of whether the activity constitutes manufacture of machinery under Chapters 84 or 85.
3. Classification of imported M.S. Plates for the fabrication of "Steel Bottoms."

Analysis:
1. The appeal concerned the interpretation of Notification No. 58/87, which grants duty exemption for goods used in the manufacture of machinery falling under Chapters 84 and 85 of the Customs Tariff. The Collector rejected the claim for concessional benefit, stating that the M.S. Plates were imported for renovation/repair of Mercury Electrolytic Cells, not for the manufacture of machinery. The Notification only applies to items used in the manufacture of machinery, not for replacements of parts. The Collector emphasized that the benefit is for machinery under specific chapters and not for component parts.

2. The appellants argued that the activity led to the manufacture of machinery with individual functions, citing that the "Steel Bottoms" were machines with individual functions. However, it was revealed that only M.S. Steel Plates were used to manufacture "Bare Bottoms," which were part of the Mercury Electrolytic Cells. The Notification required goods to be imported for the manufacture of machinery under Chapters 84 and 85, not for parts or replacements. The authorities contended that the activity amounted to repair, not the manufacture of machinery, as the worn-out "bare bottoms" were replaced using imported M.S. Sheets.

3. The Tribunal upheld the lower authorities' decision, stating that the imported M.S. Plates were used for renovation and repair of "bare bottoms," not for the manufacture of machinery under Chapters 84 and 85. The certificates issued by the authorities confirmed that the purpose of import was for replacement of old worn-out bottoms, not for the manufacture of machinery. The Tribunal concluded that the appellants did not satisfy the terms of the Notification and were not entitled to the duty exemption. The rejection of the claim under the Notification was deemed justified, and the appeal was dismissed.