2005 (6) TMI 329 - AT - Customs

Summary

Issues:
- Whether the goods imported by the respondents and cleared under Bill of Entry dated 10-12-90 were eligible for the benefit of Notification No. 217/86-C.E.

Analysis:

The main issue in this appeal before the Appellate Tribunal CESTAT, Chennai was whether the goods imported by the respondents and cleared under a specific Bill of Entry were eligible for the benefit of Notification No. 217/86-C.E. The appellant contended that the Notification did not apply to imported inputs as it granted exemption to goods "manufactured in a factory and used within the factory of production." The appellant's position was supported by the Learned SDR. On the contrary, the consultant for the respondents relied on the Supreme Court's decision in Thermax Private Ltd. v. Collector of Customs to argue that the origin of the inputs, whether imported or manufactured in India, did not affect the applicability of the Notification. The consultant highlighted a specific paragraph from the Supreme Court's judgment to support this argument.

The Tribunal carefully considered the arguments presented by both sides. It was noted that the Supreme Court in the case of Thermax Pvt. Ltd. had clarified the issue related to the applicability of a similar Notification. The Tribunal emphasized that the Notification in question granted exemption to inputs manufactured in a factory and used in the manufacture of the final product within the same factory. Since the goods in this case were not manufactured in the respondents' factory but were imported and used for production, it was concluded that such use did not constitute captive consumption as required by Notification No. 217/86-C.E. Therefore, the benefit of the Notification was deemed incorrectly extended to the respondents by the lower appellate authority.

Ultimately, the Tribunal set aside the lower appellate authority's decision and allowed the appeal in favor of the Revenue. The operative part of the order was pronounced in court on 8-6-05, marking the conclusion of the case before the Appellate Tribunal CESTAT, Chennai.