ORDER
Gowri Shankar, Member (T)
1. The respondent is manufacturer inter alia of life jackets. The question for consideration in this appeal is whether the life jackets manufactured by the respondents are entitled for exemption from duty contained in Notification 82/84. The notification exempts capital goods, components and raw materials cleared for the repair of goods falling under Heading 89.01, 89.02, 89.04, 89.05 other than those excluded in 89.06, from the duty of excise. The notification contains some conditions regarding procedure to be followed. In the order impugned, the Commissioner (Appeals) has noted that according to the Convention for the Safety of Life at Sea and the Merchant Shipping Act, life jackets are to be provided on all ships and the safety equipment certificate for such ship is to be issued only when there is adequate provision of such life jackets. Replacement of a life jacket on a ship amount to replacement of a component and hence is repair. The contention in the appeal is that the life jackets are not to be considered as component of a ship, capital goods or raw material. These contentions are reiterated by the departmental representative. The Senior Manager of the respondents also reiterates the reasoning in the impugned order of the Commissioner (Appeals). He says that a ship cannot sail unless it is provided with life jacket. Therefore the life jacket has to be considered as components of the ship.
2. Although no evidence is produced before us to show that the International Convention for the Safety of Life at Sea, 1974 has been ratified by an Act of Parliament, it may well be, as contended that, the Merchant Shipping Act or other statute required provision of life jackets aboard ships for the safety of persons upon them. Assuming this to be the case, this fact by itself does not show that the life jackets is a part of the ship. A ship by itself is complete when it is manufactured. It can sail in the absence of a life jacket, or other life saving equipment, which are placed on it thereafter. A component of machine is one that form part of such machine and without which that machine is inoperable. Since the ship is complete without the life jacket it would be incorrect to say that the life jacket is a component of the ship. It may be more appropriate to say it is a ship’s store. Therefore provision of life jackets, on replacement of it on board a ship would not amount to replacement of a component and hence repair. Therefore the benefit is not available to such life jackets.
3. We accordingly allow the appeal, set aside the order of the Commissioner and restore the Assistant Commissioner’s order.