1997 (5) TMI 203 - AT - Central Excise

Summary

Issues:
Interpretation of Customs Notification No. 347/86 - Distinction between Super Kanthal Heating Elements and Mosilit Heating Elements - Effect of subsequent amendment to the notification - Compliance with conditions of the notification - Trade names versus actual product composition.

Analysis:
The appellants imported Mosilit Heating Elements and sought the benefit of Customs Notification No. 347/86, claiming it covered their imported goods. However, their claim was rejected on the basis that the notification exempted Super Kanthal Heating Elements specifically, not Mosilit Heating Elements, which were of German origin. The consultant for the appellants argued that both types of heating elements were essentially the same, differing only in trade names, with Super Kanthal being a trademark of a Swedish company and Mosilit a trademark of a German company. The consultant also highlighted an amendment to the notification in 1982 providing exemption to heating elements. The Departmental Representative (DR) contended that the notification should be strictly interpreted and that amendments could not have a retrospective effect, citing relevant judgments.

The Tribunal examined the certificates provided by the Industrial Adviser and the Department of Electronics, confirming that both Super Kanthal and Mosilit Heating Elements were technically identical, composed of Molybdenum Silicide, and operated at high temperatures for industrial heating purposes. The certificates clarified that the difference between the two was merely the trade names, with Kanthal being Swedish and Mosilit being German. The Tribunal noted that the appellants imported the elements from Germany due to cost advantages while maintaining quality. The Collector acknowledged the technical equivalence of the two products but denied the benefit based on the specific mention of Super Kanthal in the notification.

The Tribunal held that if Super Kanthal and Mosilit Heating Elements were essentially the same product distinguished only by trade names, the exemption under the notification should apply to heating elements used for specific purposes, not limited by trade names. The Tribunal emphasized that the crucial condition of obtaining a recommendatory letter from specified authorities had been fulfilled, and that the notification should not be construed in a way that rendered it meaningless. While acknowledging the need for strict interpretation of exemptions, once the conditions were met, the notification should be given full effect. Considering the consistency in product composition and purpose, supported by certificates from authorities, the Tribunal concluded that the appellants had successfully demonstrated their eligibility for the exemption. Consequently, the impugned order was set aside, and the appeal was allowed.