TMI Blog2001 (3) TMI 94X X X X Extracts X X X X X X X X Extracts X X X X ..... s a life span was only five years. Therefore, in his opinion, while importing second-hand annealing furnace if the importer has replaced the periodically replaceable ceramic wool with a new one which also has a limited life span, same cannot be construed as importing a new machinery because in the opinion of the Collector there is nothing improper in importing second-hand machinery with certain parts which require periodical replacement with new parts so long as the nature of the basic machinery so imported remains to be a second-hand machinery. The tribunal though agreed with the finding of the Collector that the ceramic wool is a periodically replaceable part still held prior permission of the Board was necessary for such machinery which we find difficult to sustain in the view taken by us herein above. Hence we are in agreement with the view expressed by the Collector. Appeal allowed. - 6769 of 1999 - - - Dated:- 30-3-2001 - S.P. Bharucha, N. Santosh Hegde and Y.K. Sabharwal, JJ. [Judgment per : Santosh Hegde, J.] - This appeal is directed against the order of the Customs, Excise and Gold (Control) Appellate Tribunal, (the 'tribunal'), West Regional Bench, Mumbai, date ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... imperative that the ceramic wool in the same had to be replaced with new wool because the old ceramic wool had outlived its utility. 4.The Collector as per his order dated 31-3-1993 substantially dropped the charges levelled in the show cause notice and came to the conclusion that the machineries imported viewed as a whole was substantially old and that the Thyristor Converter was an essential part of the Temper Mill, and except for this particular part all other components of the Temper Mill were second-hand. He was also of the opinion, that the ceramic wool which was a part of the annealing furnace was a periodically replaceable part, hence, same cannot be individually treated as a new machinery, therefore, was of the opinion that the import in question was covered by Notification 77/80-Cus. and that the entire imported machinery after fabrication remained within the KFTZ and was used for the purpose of export production, accordingly he did not consider it necessary to either impose the penalty and duty as reflected in the show cause notice nor did he think it necessary to confiscate the goods. 5.As noticed above, the Department being aggrieved by the said order of the Colle ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on, he did not think it was necessary to invoke the provisions of Sections 111(d) and 112(a) of the Customs Act on the facts of this case. But the tribunal has differed from this view taken by the Collector holding that the notification in question did not permit the import of any new part or replacement material and further held that the Notification in question being an exemption notification, the same will have to be construed strictly, hence, the extended meaning sought to be given by the Collector to the words; "for being used in connection with production" was rather fanciful. 10.In our opinion, a notification like the one which falls for our consideration (77/80-Cus.) cannot be read in a narrow manner so as to defeat the object of the notification because the notification in question permits the importation of certain second-hand machinery to be used in the manufacture of goods meant only for export in units situated in the defined Zones. The object and purpose of such exemption notification is to encourage exports by granting exemption from customs duty on materials that are required to be imported for the purpose of manufacture of resultant products, which are to be excl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of fact, if the tribunal had come to the conclusion that either the Thyristor converter or the ceramic wool were not necessary parts of the Temper Mill and the furnace, or that these parts were being imported for purposes other than for the use in the Temper Mill and the furnace then the view taken by the tribunal could have been justified. But once it came to the conclusion that both the Temper Mill and the annealing furnace is imported in a second-hand condition and these parts were necessary for the working of that machinery, it ought not to have interfered with the order of the Collector because these parts even though new were only a small constituent of the larger machinery. In the instant case, the Thyristor Converter constituted only 9% of the total value of the Temper Mill while ceramic wool which has a life span of only 5 years had to be replaced because the furnace without the same would not have performed to its optimum capacity with the old ceramic wool. In our opinion, unless it can be established that in the guise of importing a second hand machinery in fact the importer has imported substantially a new machinery, it is not possible to come to the conclusion that th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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