2006 (11) TMI 450 - AT - Customs

Summary

Issues involved: Interpretation of Notification No. 32/97-Cus for duty-free clearance of raw materials for export of 'Gelatine capsules' by merchant exporters, compliance with Customs Rules for job work manufacturing, benefit of exemption under the Notification.

The judgment by the Appellate Tribunal CESTAT, CHENNAI addressed the appeal by merchant exporters claiming benefits under Notification No. 32/97-Cus for importing raw materials to manufacture 'Gelatine capsules' for export. The Notification allowed duty-free clearance of raw materials for manufacturing and exporting final products to the raw material-supplier, facilitating manufacturing by a job-worker as noted by the Commissioner (Appeals). The issue arose when the original authority contended that the importer did not manufacture the export goods as required by the Customs Rules. However, the Commissioner (Appeals) interpreted the Notification in line with the export promotion policy, considering the job-worker's compliance with the Rules as sufficient for the importer to qualify for the Notification's benefits.

The Revenue's grievance in the appeal was that the exemption under the Notification was granted to the respondents despite not following the Customs Rules themselves. Upon examining the Notification's provisions, the Tribunal concluded that the condition requiring jobbing to adhere to the Rules was met by the importer through the job worker's compliance. The Tribunal applied the legal principle that actions of a duly constituted agent are attributed to the principal, thus finding the importer to have fulfilled the condition. Consequently, the lower appellate authority's decision was upheld, affirming that the importer had satisfied the necessary requirements for availing the benefits under the Notification.

In conclusion, the Appellate Tribunal CESTAT, CHENNAI dismissed the appeal, affirming that the importer, through the job worker's actions in compliance with the Customs Rules, had met the conditions stipulated in Notification No. 32/97-Cus. The Tribunal emphasized that the lower appellate authority's decision was sound, and there was no error in granting the benefit of the Notification to the respondents based on the job worker's adherence to the Rules.