Exemption Exclusion to be interpreted Broadly

In a classification and exemption dispute, the Tribunal ruled that components used in manufacture of automotive systems are not eligible for concessional customs duty where they are “suitable for use” in motor vehicles. 

The expression was interpreted to include capability of use and not limited to direct usage. The Tribunal also upheld classification under a residual heading and clarified that interest and penalty on IGST cannot be levied for periods prior to statutory amendment. The ruling reinforces strict interpretation of exemption notifications and functional analysis of goods.