Full Judgment
However, in regard to the licensing aspect he took a lenient view and ordered the clearance of the machine against OGL by cautioning the importers that such leniency would not be shown in future.
2. On behalf of the appellants Shri N.C. Sogani, learned Consultant referred to the relevant catalogue issued by the manufacturer and submitted that even though the machine had been described as Automatic Wire Twister AWY-40, it was essentially meant for cutting and stripping of wires. He pointed out that the detailed specification and capacity of the machine as given in the catalogue was in respect of its cutting and stripping operations. He stated that as far as twisting mechanism was concerned, the manufacturer had stated that it could be set in idle position when cutting and stripping only was required. He contended that even though the machine was capable of performing additional function namely, twisting, it was eligible for the benefit of Notification No. 118/80-Cus., dated 19-6-1980 since it was essentially an automatic wire cutting stripping machine. He contended that the additional function of twisting which the machine was capable of performing would not disqualify it from the benefit of OGL and the Notification No. 118/80-Cus., dated 19-6-1980. In support of his contention he placed reliance on the judgment of the Madras High Court in the case of Titan Watches Ltd. v. Union of India, reported in 1994 (69) E.L.T. 22 (Mad.) and the Tribunal's decision in the case of Andhra Patrika, Madras, reported in 1983 (13) E.L.T. 1103. He also submitted that during the proceedings before the Additional Collector the appellant had also relied upon a letter dated 11-1-1985 issued by the Department of Electronics wherein it was stated that the machine in question was an automatic wire cutting and stripping machine with additional function of wire twisting.
3. On behalf of the respondent Shri S.K. Tyagi, learned JDR reiterated the findings of the Collector (Appeals) in the impugned order and pleaded for the rejection of the appeal.
4. We have examined the record of the case and considered the submissions made on behalf of both sides. The only question that arises for consideration is whether the imported machine which was declared in the relevant invoice and Bill of Entry as "automatic wire cutting and stripping machine" was eligible for clearance under OGL vide Sri. No.11/42 of Appendix 1B of Import Policy book 1984-85 and also the benefit under Notification No. 118/80-Cus., dated 16-9-1980 (as amended). It is seen that the said Entry No. 11/42 of the relevant OGL covers "automatic wire cutting and stripping machine with or without welding attachment" under the heading "Machine for Manufacture of Electronic Components and Equipments". Similarly Sri. No. 105 of the table annexed to Notification No. 118/80-Cus., dated 19-6-1980 (as amended) covers "automatic wire cutting and stripping machine with or without welding attachment or semi-conductor, capacitor and resistors." 5. For the proper appreciation of the appellants' contention that the imported machine automatic wire twister AWY-40 was essentially a "wire cutting and stripping machine" and the twisting mechanism was only an additional capability which could be set in idle position when only cutting and stripping of wire was required, we refer to the following extract from the manufacturer's catalogue in respect of the said machine :- "This machine performs cutting, stripping and twisting operations simultaneously on both ends of insulated wires. The machine has been recently developed for users who have in the past had problems with the stripped ends of stranded wires being damaged during storage.
The twisting device binds the wire strands tightly together therefore reducing labour in preparing the wire for tinning or soldering. The twisting mechanism can be set in the idle position when cutting and stripping only is required. The twisting device is extremely versatile and can be set for twisting both ends, twisting one end only and varying numbers of twists per length." On a plain reading of the details regarding the design and functions of the machine extracted above, it is evident that even though it is capable of performing an additional function i.e. twisting of wires, it is essentially meant for cutting and stripping of wires. It is seen that in the case of Titan Watches Ltd. v. UOI (supra), Madras High Court has held that exemption Notification No. 45/85-Cus., dated 26-2-1985 under which concessional rate of duty was prescribed for horological machine and testing equipments could not be denied in respect of imported machine and equipments which were not exclusively meant for the manufacture or assembly of mechanical wrist watch and quarts analogous wrist watch and parts, thereof and DGTD certificate could not be ignored by the Customs. It is also seen that in the case of Andhra Patrika, Madras v. Collector of Customs, Madras (supra) the Tribunal had held that a machine which was an automatic film processor and in addition to film processing was capable of performing other functions of paper processing was eligible for the exemption under Notification No. 11/77-Cus. which did not stipulate that Automatic Film Processor covered thereunder should be exclusively for film processing only.
6. On the ratio of the judgments discussed above and also having regard to the fact that the Department of Electronics vide their letter dated 11-1-1985 had clarified that Model AWY-40 Automatic Wire Twister was an Automatic Wire Cutting and Stripping machine with additional function of wire twisting, we hold that the machine in question was eligible for clearance under OGL vide Sri. No. 11/42 of Appendix 1B of relevant Import Policy and also exemption under Notification No. 118/80-Cus., dated 19-6-1980.
7. In view of the foregoing the impugned order is set aside and the appeal is allowed with consequential relief.