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Issues:
1. Classification of imported goods under Notification No. 21/2002. 2. Eligibility for exemption under Sl. No. 168 of the notification. 3. Certification and clarification by C.L.R.I regarding the nature of the imported goods. 4. Claim of the appellants as manufacturer exporters of leather garments. Classification of Imported Goods: The appellants, a leather garment manufacturer exporter, imported goods described as Nylon Mesh Lining Material. The Department classified the items under Sl. No. 167A of Notification No. 21/2002, while the appellants claimed exemption under Sl. No. 168, which includes Lining and Interlining Materials. C.L.R.I initially certified that the goods cannot be used as Lining Material for leather goods but later clarified that Nylon Mesh, although not generally used as Lining Material, is sometimes used as Inner-Lining Material for leather garments. Considering this clarification and the appellants' status as actual users and manufacturer exporters of leather garments, the Tribunal held that the claim of the appellants for exemption under Sl. No. 168 was valid. The classification under 5407.4290 was not disputed, and the appeal was allowed. Eligibility for Exemption: The main issue was whether the imported goods could be considered as Lining Material for leather goods to qualify for exemption under Sl. No. 168 of Notification No. 21/2002. The Tribunal relied on the subsequent clarification by C.L.R.I that while Nylon Mesh is not commonly used as Lining Material, it can serve as Inner-Lining Material for leather garments based on specific requirements. Additionally, a certificate from the Council for Leather Exports supported that the imported goods would be used solely in the manufacture of leather garments. Considering these factors, the Tribunal concluded that the appellants were eligible for the exemption under Sl. No. 168. Certification and Clarification by C.L.R.I: C.L.R.I initially certified that the imported goods were not suitable as Lining Material for leather goods. However, a subsequent clarification highlighted that Nylon Mesh, although not typically used as Lining Material, could be utilized as Inner-Lining Material in certain cases, such as for collars in leather garments. This clarification played a crucial role in establishing the nature of the imported goods and supported the appellants' claim for exemption under Sl. No. 168 of the notification. Claim of the Appellants as Manufacturer Exporters: The Tribunal emphasized that the appellants were manufacturer exporters of leather garments, not traders. This distinction was significant in determining their eligibility for the exemption under Sl. No. 168 of the notification. The certificate issued by the Council for Leather Exports further validated that the imported goods would be exclusively used in the manufacturing process of leather garments, reinforcing the appellants' claim and supporting the Tribunal's decision to allow the appeal.
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