Interpretative rules cannot be applied for denying exemption
The point of dispute is whether in cases where computer casing/chassis and power supply unit were imported in a form not fitted together as an assembly, but separately in the same consignment, the benefit of Notification No. 21/2002-Cus., dated 1.3.2002, (vide S.No. 276) can be denied by applying rule 2(a) of the General Rules for the Interpretation of the First Schedule (GIR).
The issue was discussed in the Chief Commissioners” conference and the Chief Commissioners noted that there are several rulings of CESTAT that for the sake of denial of the benefit of a notification, Rule 2 (a) cannot be invoked.
Board has accepted the decision of the Conference and has clarified that the goods have to be classified in the form as presented and rule 2 (a) of the GIR cannot be applied for the sake of allowing/disallowing the benefit of a notification, unless the exemption notification is based on classification of the item under a particular heading of the Customs Tariff. For the purpose of classification, Rule 2(a) of the General Rules of Interpretation could be applied.
CIRCULAR NO. , Dated: October 3, 2005