- (1.) In this batch of appeals filed by the M/s Indian Telephone Industries ltd. , a common question arises for consideration in the backdrop of the following facts.
(2.) The appellants are Public Sector Industrial Undertaking engaged in the manufacture and sale of telecommunication equipment. They have a department or a unit known as the "research and Development Unit" in their undertaking. This Unit undertakes research work. The appellants imported certain goods for the use of this Research Unit and claimed exemption under notification No. 70/81-Customs dated 26/3/1981. This notification issued under Section 25 (1 of the Customs Act, 1962 superseded the earlier notification issued by the government of India No. 2 II-Customs dated 2/8/197676. It provides that the central government on being satisfied that it is necessary in the public interest so to do, exempts all scientific and technical instruments, apparatus, equipments including spare parts etc. imported by a research institution from the whole of the duty of customs leviable thereon and the whole of the additional duty leviable thereon under Section 3 of the customs Tariff Act subject to three conditions, namely, (1 that the imported goods are such as are not manufactured in India; (2 that the import of the goods in respect of which exemption is claimed was essential for research and that they shall be used only for that purpose; and (3 the said institution is not engaged in any commercial activity.
(3.) The tribunal, therefore, raised three questions for consideration namely: (1 whether Research and Development Unit of the appellants was a research institution; (2 whether the said Research and Development Unit was engaged in any commercial activity; and (3 whether the articles in question were imported by the said Research and Development Unit. The tribunal answered the first question in the affirmative and the second question in the negative, i. e. , both in favour of the appellants, but it answered the third question in the negative holding that the goods were not imported by the Research and Development Unit of the appellants. It is, therefore, necessary for us to consider if the tribunal was right in rejecting the claim for exemption solely on the basis of its finding on the third question.;