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Issues:
1. Interpretation of Notification No. 125/86-Cus. dated 17-2-1986 regarding benefit availability for a high forming, cutting, and wrapping machine. Analysis: The central issue in this case was the interpretation of Notification No. 125/86-Cus. dated 17-2-1986 concerning whether the benefit provided in the notification applied to a high forming, cutting, and wrapping machine. The Appellate Tribunal CEGAT, New Delhi, heard arguments from both sides regarding the eligibility of the machine for the concessional rate of duty under the notification. The Revenue, as the Appellant, contended that the benefit of the notification was intended only for machinery specifically performing the wrapping function, as evident from the wording of the notification and other entries therein. The argument emphasized that the concessional rate of duty was not meant for composite machines performing multiple functions, but only for those solely dedicated to the wrapping process. On the other hand, the Respondent argued that the imported machine, despite being an integrated unit with forming, cutting, and wrapping functions, was essentially a high-speed automatic wrapping machine. The Respondent highlighted the interpretation of similar terms by relevant authorities like DGTD and Chief Controller of Imports and Exports, who considered such machines to include additional components necessary for the wrapping process. The Tribunal analyzed the facts presented by both parties and noted that the imported machine, classified under Heading 84.22 as Wrapping Machinery, was also performing forming and cutting functions besides wrapping. Given the classification as a wrapping machine by the Customs Department, the Tribunal held that the benefit of Notification No. 125/86-Cus. (Sl. No. 29) could not be denied to the machine. The Tribunal cited precedent cases to support its decision, including the case of Collector of Customs v. MOI Engineering Ltd., where a similar interpretation was upheld. In conclusion, the Tribunal rejected the Appeal filed by the Revenue, affirming that the machine in question, classified as a wrapping machine, was eligible for the concessional rate of duty under Notification No. 125/86-Cus. This judgment underscores the importance of consistent classification for determining eligibility for duty exemptions under relevant notifications.
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