1996 (12) TMI 197 - AT - Customs

Summary

Issues:
Whether A.C. Servo Motors and A.C. Servo Controls imported by M/s. TICO Machines (P) Ltd. were eligible for exemption under Notification No. 181/87-Cus.

Analysis:
The appeal before the Appellate Tribunal CEGAT, New Delhi involved the eligibility of A.C. Servo Motors and A.C. Servo Controls for exemption under Notification No. 181/87-Cus. The dispute arose as the Assistant Collector of Customs had deemed these imported items as components of CNC system, thus not covered by the said Notification. However, the Collector of Customs (Appeals), Madras ruled that the goods were not parts of the CNC system.

The Revenue contended that the imported components were utilized in a CNC horizontal drill center, falling outside the purview of the Notification which excludes CNC systems and their components. It was argued that the items imported were indeed components of the CNC system for use with the Horizontal drill center, hence not covered under the Notification.

The Tribunal examined Notification No. 181/87-Cus., which provides partial exemption for parts required for initial setting or assembly of specified articles, subject to conditions. The key issue was whether the imported A.C. Servo Motors and A.C. Servo Controls were part of the CNC system or its components. The argument presented was that these goods were necessary for the horizontal drill center, distinct from a complete CNC machine.

The Tribunal noted that the Ld. Collector of Customs (Appeals) had differentiated between the CNC system and the CNC version of the machine, concluding that the imported goods were not part of the CNC system. The Revenue failed to demonstrate that the motors and controls were integral to the CNC system. The Tribunal emphasized that unless it is established that the items were part of the CNC system, the Notification's benefit cannot be denied.

After considering all relevant aspects, the Tribunal upheld the findings of the Ld. Collector of Customs (Appeals) and rejected the Revenue's appeal. This decision underscores the importance of establishing the specific role of imported components within the context of relevant regulations to determine their eligibility for exemptions.