Judgment:
1. Since both the appeals involve a common issue, they are being heard together and disposed of by this common order.
2. The issue for decision in this appeal is the eligibility of Motor running capacitors imported by the respondents herein to the benefit of Notification No. 188/87-Cus., which is available inter, alia to capacitors, other than power capacitors - according to the Revenue, the benefit cannot be extended to the imported goods as they are a type of power capacitors, as seen from the Indian Standard IS 1985 (Part XL 11) 1977 Electro Technical Vocabulary Part XL 11 which is the book for IS Standards for definition of Power Capacitors.
3. We have heard Shri K.K. Jha, learned DR and Shri Ashok Mehta, learned Advocate. The Classified List of Indian Standards - Electro-technical complied by Bureau of Indian Standards includes Motor capacitors under the heading 'Power Capacitors' and the IS Standard therefore is IS 2993 : 1975. Some of the other power capacitors that are shown in this list are Series capacitors for Power Systems, Shunt Capacitors for Power Systems etc. There are different IS specifications for different types of power capacitors. For example, the IS Standard specification for a Series Capacitor for Power System is IS: 9835 -1981. However, this does not lead to the conclusion, as contended by the learned Counsel, that Motor capacitors are not power capacitors. In the 1985 Publication of the ISI, Power Capacitors and Motor Running Capacitors have been defined as under:Power Capacitor : A capacitor intended for use in a power net work.Motor Running Capacitor : A power capacitor which provides a leading current to an auxiliary winding of a motor 4. Form this, it is seen that a Motor Running capacitor is also one variety of power capacitor. Hence although, the two kinds of capacitors are used for different purposes and have different applications (it is seen from the opinion dated 18th February, 1988 given by the Central Power Research Institute to M/s. Kirloskar Bros, that Motor Running Capacitors are used to improve starting and running torque of certain phase motors and their main purpose is to improve the starting and running capability of motors while power capacitors are basically required for improving the power factor of the electric system and to improve voltage regulation of the system) and although the Motor running capacitors are specified by capacity rating in microfarad and working voltage rating while power capacitors are specified by working voltage and KVAR rating, the fact remains that Motor Running capacitors are basically Power capacitors.
5. The difference in size and dimensions between the two types of capacitors which has been relied upon by the Collector of Customs (Appeals) to hold that Motor running capacitors are not Power capacitors, is not sufficient in itself to distinguish between the two types of capacitors. The description of capacitors for industrial power factor connection and Motor capacitors separately in supplier's catalogue (Ducati Catalogue) cannot also be relied upon to hold that Motor running capacitors are not Power capacitors. The contention that Power capacitors are meant only for Power factor connection is also not correct as per the Electro-technical vocabulary Part XL 11 since this Standard also covers Power capacitors which are not used for Power factor connection. Since Motor capacitors are included in the IS 1985 (Part XL 11 -1977) Electro-technical Vocabulary, we do not accept the respondents plea that Motor capacitors are not Power capacitors and since Notification 188/87 excludes all power capacitors from its scope, the contention of the respondents that the word 'power' has been used in the 1985 Publication of IS - Power Capacitor and Motor Running Capacitor in a loose sense is not tenable. Exemption Notification is to be interpreted strictly and going by strict interpretation, all types of Power capacitors have to be treated as not falling within the coverage of the Notification. In the result, we hold that the Motor running capacitors imported by the respondents herein are a variety of Power capacitors and are not entitled to the benefit of Notification 188/87. Accordingly, the impugned order is set aside and the appeals of the Revenue are allowed.