MODI RUBBER LIMITED vs UNION OF INDIA & ANR.

The Supreme Court held that the Polypropylene Liner Fabric (PPLF) imported by Mode Rubber Limited should be classified under Item 72(3) ICT as a component part of machinery rather than under Item 53 ICT as a textile manufacture. The Court emphasized that PPLF is essential for the functioning of the machinery and thus qualifies as a component part. The levy of duty at 305 percent under Item 53 ICT was deemed incorrect, and the Court directed that the duty should be recalculated accordingly.