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2023 (3) TMI 1009 - SC - Central ExciseClassification of imported goods - Cutter Suction Dredger along with other accessories and equipments including Pipes, Anchor Boats, Multicats, Dredging pumping units, Engines and other spares and accessories - to be classified under the Chapter Heading 8905 10 00 of the Customs Tariff Act, 1975 or not - Applicability for benefit of Nil rate of duty, in terms of Notification No. 21/2002- CUS dated 01.03.2002 - Assistant Commissioner was of the opinion that the multicats, M.S. pipes, imported dredging pumping units and other goods were classifiable under different tariff headings and were not entitled to exemption under the notification as “DREDGERS”. HELD THAT:- This Court after relying upon SARASWATI SUGAR MILLS VERSUS COMMISSIONER OF CENTRAL EXCISE, DELHI-III [2011 (8) TMI 4 - SUPREME COURT] and taking aid from the dictionaries held that the Guide Car could not be said to be a component of the Coke Oven Battery. It was submitted that by the same analogy, the pumping units, air compressors, pumps, pipes, wire mesh, steel angle plates and outward engine boat, all of which were granted the benefit of exemption notification, cannot be considered ‘components’. It was besides urged that the Appellate Commissioner had disregarded Note 2 to Section XVII of the Act which had clearly excluded the articles in question; they had to be classified separately under the relevant heads. The Appellate Commissioner considered the previous order in Boskalis Dredging India Pvt. Ltd. [1999 (2) TMI 700 - SC ORDER] and dealt with each item separately. It was noticed that the dredger pumping units are essential for the cutter suction dredgers unlike in the case of hopper dredgers. Furthermore, the use of air compressors is also necessary to ensure a continuous supply of air to the booster pumps. The Appellate Commissioner took care to exclude some of the claims made by the appellant towards generators, consumables lathe etc. Likewise, the Appellate Commissioner allowed the claim for exemption in respect of steel angle plates, pipes, and wire mesh which was held to be useful for the erection of booster pump stations. A plain reading of the Note 2 of the Section XVII shows that parts and parts of accessories cannot apply to specified articles, including items classifiable under 8401-79, 8481-82, and to some extent, 8483. In the present case, in this Court’s view, the error committed by the CESTAT is that each of the excluded items has been treated as a separate part and not integral to the functioning of a Cutter Dredger. Without the compressors and the pipes necessary to pump the dredged material, the cutter dredger would cease to function as such. The other items, likewise, are integral parts of the Cutter Dredger, even though they might independently be utilized, for other purposes. The test is not whether multiple uses are possible but whether these parts are essential for the purpose of dredging in a Cutter Dredger. As far as the exclusion of generators is concerned, this Court notices that concurrently the order in appeal, as well as the order of the CESTAT, have excluded it from the benefit of the exemption notification. The Court finds no reason to interfere with those findings. Decision in the case of M/S STEEL AUTHORITY OF INDIA LIMITED VERSUS COMMISSIONER, CENTRAL EXCISE & CUSTOMS [2022 (9) TMI 740 - SUPREME COURT] distinguished. The impugned order is hereby set aside. The order of the Appellate Commissioner is accordingly restored - Appeal allowed.
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