2008 (8) TMI 645 - AT - Customs

Acetone - Import as cleaning agent for sugar under DFRC licence - Notification No. 46/2002-Cus.

Summary

Issues:
Import and clearance of Actone under DFRC Licence at nil rate of basic customs duty.

Analysis:
The dispute in this case revolves around the import and clearance of 74.175 MTs. of Actone under a DFRC Licence at a nil rate of basic customs duty, as per Exemption Notification No. 46/2002. The issue arose when the Revenue contended that acetone could not be considered a cleaning agent for sugar, leading to proceedings against the respondents. The Commissioner (Appeals) extended the benefit to the respondents based on their submission, which included references to technical journals and a book on sugar manufacture in India. The Commissioner observed that the acetone imported could be used as a cleaning agent in various industries, including sugarcane, and allowed the clearance of imported goods against the DFRC licence. The Revenue challenged this decision, arguing that the input/output norm specified by DGFT mentioned Sodium Loryal Sulphate as a cleaning agent, not acetone. However, the Tribunal found no issue with the Commissioner's decision, noting that the licence permitted the import of cleaning chemicals in addition to Sodium Loryal Sulphate. Therefore, the Tribunal rejected the Revenue's appeal, upholding the Commissioner's order.

This judgment highlights the importance of interpreting the terms of a licence accurately and considering the practical applications of imported goods in various industries. The Tribunal's decision emphasizes the need to establish a clear nexus between the goods exported and imported against a licence. Additionally, the case underscores the significance of providing relevant evidence, such as references to technical literature, to support arguments regarding the intended use of imported goods. The Tribunal's analysis showcases a meticulous review of the licence terms and the specific mention of cleaning agents, ultimately leading to the rejection of the Revenue's appeal and the affirmation of the Commissioner's decision in favor of the respondents.