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Classification of imported grinding and polishing machine as tools under Heading 84.60 of Customs Tariff Act and eligibility for duty exemption under Notification No. 206/76-Cus. Analysis: The appeal before the Appellate Tribunal CEGAT, New Delhi involved the classification of a grinding and polishing machine imported by the General Manager of Opto Electronics Factory. The central issue was whether this machine could be considered as tools under Heading 84.60 of the Customs Tariff Act and thus qualify for duty exemption under Notification No. 206/76-Cus. The appellant's representative argued that the imported machine fell under the exemption category for tools required for the manufacture of guided weapons, as specified in the notification. They contended that the machine was essential for producing precision optical components used in guided weapons and should be considered a tool for this purpose. The appellant emphasized the specialized nature of the machine, its high precision capabilities, and its designation by the foreign supplier as a grinding and polishing machine. In contrast, the respondent's representative asserted that the imported machine did not meet the criteria to be classified as a tool, especially when compared to other items listed in the notification such as components, spares, jigs, and fixtures. They argued that the term "tool" should be interpreted in conjunction with the other items mentioned in the notification, indicating that the machine tools imported did not fall under this category. Upon reviewing the arguments, the Tribunal examined the classification of the imported product under Heading 84.60 of the Customs Tariff Act, which pertains to machine-tools for various metal finishing processes. The Tribunal noted that both the Assistant Collector and the Collector (Appeals) had acknowledged that the imported goods were grinding and polishing tools. It was established that the imported machine tools were used in the manufacture of guided weapons, and there was no dispute regarding this fact. The Tribunal concluded that since the imported machine tools were classified under Chapter 84 and were utilized in the production of guided weapons, they qualified as tools under the relevant notification. The Tribunal found no basis to restrict the definition of tools solely to Chapter 82 and ruled in favor of the appellants, allowing the appeal and granting them the benefit of duty exemption under Notification No. 206/76-Cus. This comprehensive analysis of the issues involved in the legal judgment highlights the arguments presented by both parties, the interpretation of relevant legal provisions, and the Tribunal's decision based on the facts and legal principles discussed during the proceedings.
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