S.C.Agrawal, J. - (1.) The appellant is a manufacturer and exporter of Lightening Arrestors which are supplied to electricity boards, railways and other public sector undertakings. The appellant was awarded a Deemed Export Order (Contract) by the Railway Board for supply of 937 numbers of Metal Oxide Gapless Type Lightening Arrestors (hereinafter referred as Lightening Arrestors). The said contract was entered into under an International Development Scheme. For the manufacture of Lightening Arrestors, Porcelain housings (H.T. Insulators) are required and these insulators are produced in a ceramic kilns. Crystar (main and gross) Beams made of Silicon Carbide are used for firing dry and hollow H.T. Porcelain bushings in the kilns and are fitted inside the kilns. The beams are susceptible to breakage and damage and have to be continuously replaced in the course of manufacture.
(2.) The appellant submitted an application before the Chief Controller of Imports and Exports of March 29, 1990 for issuance of a Special Import Licence to import various items required for the manufacture of Lightening Arrestors. The said items included Crystar beams as Kiln Furniture. The Deputy Chief Controller of Import and Export issued the Special Import Licence on April 24, 1990 for import of various items including crystar beams. Along with the said import license, the Duty Exemption Entitlement Certificate (hereinafter referred as DEEC) was also issued in the following terms: "Material imported against advance Licence No. P/L/3236631/CS.XX/16/H/90 dated 24-4-90 issued by Deputy Chief Controller of Imports and Exports, Hyderabad to the above importer and covered by the list of Materials specified under Part C of this Certificate would be eligible for exemption from Import duty subject to the conditions specified in the Notification of the Government of India, Ministry of Finance, Department of Revenue and 116/88-Cus. on 30-3-88." On import of goods into India, the appellant claimed duty free clearance on the basis of exemption granted by Notification No. 210/82-Cus dated September 10, 1982.
(3.) By Notification No. 210/82-Cus dated September 10, 1982 issued under Section 25 of the Customs Act, 1962, the Central Government has exempted from whole of the customs duty and additional duty leviable under the Customs Tariff Act, 1975, "raw materials and components required for the manufacture of goods to be supplied to International Development Association or International Bank for reconstruction and Development or bilateral and Multilateral aided projects or Asian Development Bank or United Nations Organisation or under the Aid Programme of the United Nations or for the replenishment of raw materials and components used in the manufacture of such goods already supplied". The said exemption was, however, subject to the conditions laid down in Clauses (1) to (5) of paragraph 1 of the said Notification. The case of the appellant is that the conditions laid down in the said Notification were fulfilled in the present case and, therefore, the appellant was entitled to exemption from duty on the Crystar Beams imported by it and reliance was placed on the DEEC granted by the Import Control Authorities while granting the import licence for importing the said articles. The Additional Collector of Customs has, however, held that the entry of Kiln Furniture (Crystar Beams) in the special import licence and DEEC book does not preclude the customs authorities from deciding the issue regarding eligibility of the articles for duty exemption in terms of exemption Notification No. 210/82-Cus. The Additional Collector further held that the said exemption is only in respect of raw material and components of the resultant product to be supplied to the project authorities specified in the said exemption Notification No. 210/82-Cus, itself and that the item in question are admittedly utilised as supporting structures for manufacturing Bushings and on account of bearing heavy loads and extremely high temperatures undergo high rate of wear and tear and that they are capital goods and cannot be termed as raw materials or components of the said resultant product. The said view of the Additional Collector has been upheld by the Customs Excise and Gold (Control) Appellate Tribunal (hereinafter referred to as the Tribunal) by the impugned judgment dated November 5, 1992. The Tribunal has held that the question regarding exemption from duty and the interpretation of the notification issued under Section 25 of the Customs Act has to be decided by the customs authorities alone and the fact that the import of the goods was covered by a specific mention in Part C of the DEEC has no bearing on the jurisdiction of the customs authorities because exemption from duty is one aspect while validity of import under the import license is another aspect. The Tribunal has also agreed with the view of the Additional Collector that the expression "raw materials and components required for the manufacture of the goods to be supplied" in Notification No. 210/82-Cus read with Notification No. 116/88 dated March 30, 1988 cannot be extended to include within its scope raw materials and components required for a Kiln or a furnace in which the goods to be supplied are manufactured. Hence this appeal.;