2006 (5) TMI 251 - AT - Customs

Summary

Issues:
1. Customs duty levied on fire float manufactured "in-bond" under Notification No. 21/2002-Cus.
2. Interpretation of the provisions of Notification No. 21/2002-Cus. regarding exemption of customs duty for manufactured goods in India.
3. Applicability of Tribunal judgment in the case of Mustan Taherbhai v. CC, Ahmedabad [2000 (125) E.L.T. 1001].
4. Distinction between breaking of ocean-going vessels and import of spare parts/raw materials for manufacturing.

Analysis:
1. The appeal challenged the levy of customs duty on a fire float manufactured "in-bond" under Notification No. 21/2002-Cus. The appellants imported raw materials and spare parts for the fire float's manufacture, seeking exemption under the notification. The issue was whether customs duty was applicable since the fire float was manufactured in India and not imported goods.

2. The appellants argued that the goods manufactured "in-bond" in India were not subject to customs duty as per the notification. They contended that the absence of an export condition in the notification meant no duty was chargeable. The Commissioner disagreed, citing the need for export, but the appellants referenced a previous order supporting their stance.

3. The learned DR relied on the Tribunal judgment in Mustan Taherbhai case to support the levy of customs duty. However, the appellants distinguished the case, emphasizing the absence of imported ocean-going vessels in their situation, only spare parts/raw materials for manufacturing the fire float.

4. After considering both sides' submissions, the Tribunal agreed with the appellants. They found no provision in Notification No. 21/2002-Cus. requiring export of goods manufactured in India. The Tribunal referenced a previous order where duty exemption was granted for goods manufactured in bonded premises. Consequently, the impugned order was set aside, and the appeal allowed with any consequential relief.

This detailed analysis highlights the key arguments, interpretations of relevant notifications, and the Tribunal's decision, providing a comprehensive understanding of the judgment.