2006 (8) TMI 599 - AT - Central Excise

Summary

Issues:
- Duty exemption availed by the appellants under Customs Notifications
- Allegation of imported machines being used without proper intimation
- Denial of benefit of Notifications by the Department
- Permission denied by the Commissioner to clear goods to job worker
- Interpretation of the expression "his factory" in the context of utilizing imported goods

Analysis:
1. The appellants were benefitting from duty exemption under Customs Notifications while importing capital goods for manufacturing Connectors. The Department alleged that the machines were used without proper intimation, leading to denial of the duty exemption benefits. The appellants argued that the goods were eventually used for export purposes and domestic clearance after manufacturing final products. The Tribunal noted a similar case where the Revenue appeal was rejected, emphasizing that merely sending goods to a job worker does not disqualify from the Notification benefits. Consequently, the demands confirmation was deemed improper, and the appeal was allowed.

2. The Commissioner denied the appellants permission to clear goods to a job worker for certain activities required for export or domestic purposes. The appellants cited a judgment by the Chennai Bench, which interpreted the expression "his factory" liberally, allowing clearance to job workers for export-related activities. The Tribunal, following this interpretation, set aside the denial of permission by the Commissioner, emphasizing that ownership of the factory should not be a prerequisite for utilizing imported goods under the Notification.

3. The Tribunal's decision was based on the principle that the literal meaning of a statute should be abandoned if it leads to unjust results. By relying on previous judgments and interpretations regarding the utilization of imported goods, the Tribunal concluded that the denial of registration and permission in this case was not legally sound. As a result, both appeals were allowed, overturning the Department's decision and upholding the appellants' right to duty exemption benefits under the Customs Notifications.