ORDER
Shiben K. Dhar, Member (T)
1. The respondents imported one Agitation System comprising of Agitators. These were classified under CTH 8479.82. The respondents claimed benefit of exemption Notification No. 59/87, dated 1-3-1987 (as amended). This was rejected by the Assistant Collector, who however, allowed them the benefit of exemption under Notification No. 162/89. The Collector (Appeals) however accepted the claim of respondents for exemption under Notification No. 59/87 (as amended).
2. The Revenue are in appeal against this order.
3. We have heard both sides.
4. From the order-in-appeal, it is seen that the respondents manufactured styrene Monomer (Hydrocarbon) which is partly sold and partly used as a raw material in the manufacture of polystyrene. After some preliminary processing styrene Monomer (in liquid form) which is a reactant, will be charged into the “Reactor” to get polymerised. The reactor is vacuunised to facilitate polymerisation. The Agitator system is composite machine comprising a drive, variable speed drive, hydraulic power pack, gear box, mixer shaft and impeller. Once the styrene Monomer is completely polymerised the resultant product, viz. Polystyrene, is extruded in pellet form for being bagged and marketed. The function of the Agitator is :
(1) to agitate/mix and keep the partially polymerised reactant homogenous.
(2) to control the molecular weight of the product which determines the characteristics of the finished product.
Polystrene is a Thermoplastic product in pellet form manufactured out of Styrene Monomer, which is a hydrocarbon in liquid form, by the process of bulk polymerisation.
4.2 There is no challenge to classification as such under 8479. The dispute relates only to grant of exemption under Notification No. 59/87.
5. Arguing for the respondents, the learned Advocate claimed that they are correctly eligible to exemption under Sl. No. 50 of Notification No. 59/87, since the product falls under the category of machinery used for the production of a commodity. He cites the judgments in the case of Project & Development India Ltd. v. Collector of Customs – 1989 (42) E.L.T. 98, Collector of Customs v. Escorts Ltd. -1991 (54) E.L.T. 144 and Coates of India Ltd. v. Collector of Customs -1990 (46) E.L.T. 424. For the sake of clarity, we are reproducing SI. No. 50 of Notification No. 59/87.
"50. 84.79 Goods falling under sub-heading Nos. 8479.20,8479.30,8479.40;
sub-heading No. 8479.81 excluding wire coil winders; and
machinery used for the production of a commodity."
5.2 It was contended before us by the learned DR that this SI. No. does not refer to sub-heading 8479.82, under which the goods have been classified, and since there is no challenge to classification, the goods are excluded from the purview of this SI. No. of the Notification. We however, note that while sub-heading 8479.82 is not included the relevant entry after enumerating various sub-headings lists machinery used for the production of a commodity also as eligible to exemption. The expression “and machinery used for the production of a commodity” occurs after a semi-colon which clearly indicates that this is a distinct category of goods which the Notification intended to exempt. Non-inclusion of specific heading 8479.82 under these circumstances would not disentitle the impugned goods from exemption provided, of course, the impugned goods are held to be machinery used for the production of a commodity. On going through the process of manufacture as recorded by the Collector (Appeals) himself and on perusal of the orders of the Tribunal which were placed before us, we do not have any serious doubt about the machine being a machines for the production of a commodity. The machine, it would appear, is a machinery for the production of a commodity and therefore, since such machines are listed under SI. No. 50 of the exemption Notification No. 59/87, they would be correctly entitled to exemption.
6. In view of this, we do not see any merit in the Revenue appeal and therefore, we reject the Revenue appeal and uphold the impugned order.