M/S OBLUM ELECTRICAL INDUSTRIES PVT. LTD., HYDERABAD versus COLLECTOR OF CUSTOMS, BOMBAY

Citation: [1997] SUPP. 3 S.C.R. 681 · Decided: 02-09-1997 · Supreme Court of India · Bench: S.C. AGRAWAL · Disposal: Appeal(s) allowed

cites 1 · see the full citation network in Lexace

Judgment (excerpt)

MIS OBLUM ELECTRICAL INDUSTRIES PVT. LTD., 
A 
HYDERABAD 
v. 
COLLECTOR OF CUSTOMS, BOMBAY 
SEPTEMBER 2, 1997 
B 
[S.C. AGRAWAL AND G.T. NANAVATI, JJ.] 
Customs Act 1962-Ss./2 and 25-Exemption Notification No.116/88-
Cus dated March.30, 1988-lmp01t of crystar beams as Kiln fumiture by the 
assessee in the manufacture of Lightening AITestors-Held, assessee entitled C 
to exemption from payment of customs and additional duty as conditions laid 
down for grant of exemption in clauses (a) to (g) of the notification were 
fulfilled. 
E.ipression 'Mate1ials required to be imported for pwpose of manufac-
ture of products' occuning in Notification No. 116/88- Cus dated March 30, D 
1988-To be constrned as refening not only to materials used in manufacture 
of products but includes mate1ials required in order to manufacture the 
resultallt products. 
Principles of Interpretation-Exemption Notification No. 116/88-Cus E 
dated March 30, 1988--Expla11ation-Co11strnctio11 of-Must be read so as to 
hannonise with and clear up any ambiguity in the main provision. 
The Appellant, a manufacturer and exporter of 'Lightening 
Arrestors' was awarded a Deemed Export Order (Contract) by Railway 
Board for supply of certain number of Metal Oxide Gapless TyJie Lighten-
F 
ing arrestors under an International Development Scheme. In the 
manufacture of these lightening arrestors, crystar (main and gross) beams 
made of silicon carbide were used (or 'firing' dry and hollow H.T. Porcelain 
bushings in the Kilns. The Appellant's application before the Chief Con· 
troller of Imports and Exports for issuance of a Special Import Licence to 
import various items including Crystar Beams as Kiln furniture in the G 
manufacture of the lightening arrestors was allowed. Alongwith the said 
Import Licence, the Duty Exemption Entitlement Certificate was also 
allowed on certain terms. On import of the goods into India, the appellant 
claimed duty free clearance on the basis of exemption granted by Notifica-
tion No.210/82 ·Cos. dated September 10, 1982. The Notification issued H 
681 
682 
SUPREME COURT REPORTS (1997] SUPP. 3 S.C.R. 
A under Section 25 of the Customs Act 1962 exempted from whole of the 
Customs Tariff Act 1975, 'raw materials and components required for the 
manufacture of goods to be supplied to certain institutions / projects of 
,. __ 
certain institutions or for the replenishment of raw materials and com-
ponents used in the manufacture of such goods already supplied'. The said 
B exemption was, however, subject to conditions laid down in Clauses (1) to 
(5) of paragraph 1 of the said notification. The Additional Collector of 
Customs was of the opinion that the Kiln furniture (crystar beams) were 
capital goods and could not be termed as raw materials or components of 
the resultant products so as to qualify exemption. It was further held that 
the entry of the Kiln furniture ·in the special import licence and Duty 
C Exemption Entitlement Certificate book did not preclude the customs 
authorities from deciding the issue regarding eligibility of the articles for 
duty exemption in terms of the Exemption Notification No.210/82 - Cus. 
The said view of the Additional Collector was upheld by the Customs 
D 
· Excise & Gold (Control) Appellate Tribunal (CEGAT). 
In the present appeal filed by the Appellants, it was contended by 
them that they were entitled to exemption from payment__Qf<Ustoms duty 
on crystar beams imported by them on the strength of Notifications- Nos. 
210/82 - Cus. as well as Notification No. 116/88 dated March 30, 1988. as 
crystar beams was to be treated as components required for the manufac-
E ture of the lightening arrestors. Notification No. 210/82 • Cus. contained 
the expression 'raw materials and components required for the manufac-
ture of goods' and 'or for the replenishment of raw materials and com-
ponents used in the manufacture of such goods'; whereas Notification 
No.116/88 - Cus. used the expression 'materials required to be imported 
F for the purpose of manufacture of products (resultant products) or 
replenishment of materials used in the manufacture of resultant products 
or both'. 
On the other hand, Revenue urged that to avail exemption, it was 
G necessary that the materials must be required for use in the manufacture 
of resultant products. 
Allowing the appeal, this Court 
HELD : 1.1. The Appellant had fulfilled the conditions laid down for 
H grant of exemption contained in Clauses (a) to (g

Excerpt shown. Read the full judgment & AI analysis in Lexace.