2006 (12) TMI 66 - AT - Customs

Exemption - Revenue contended that the inputs (crude palm oil) imported by appellant were not used in the manufacture of specified goods, therefore benefit of notification is not available - Held that revenue contention was not correct and allowed exemption to appellant

Summary

Issues: Appeal against denial of benefit under Notification No. 16/2000-Cus. for crude palm oil not used in the manufacture of vanaspati.

Analysis:
1. The appellant appealed against the order denying the benefit of Notification No. 16/2000-Cus. to the quantity of crude palm oil lost in an accident during transit. The appellant cited the Supreme Court decision in BPL Display Devices Ltd. v. CCE, where the Court allowed exemption for damaged raw material imported for specified goods under an exemption notification.

2. The Revenue contended that since the inputs were not used in the manufacture of specified goods, the benefit of the notification should not be available to the appellant. However, it was acknowledged that the lost quantity of crude palm oil was not diverted for any other purpose than mentioned in the notification.

3. The Tribunal noted that the appellant imported crude palm oil under the notification for the manufacture of vanaspati. The lost quantity due to the accident was not disputed by the Revenue, and there was no allegation of diversion for other purposes. Referring to the BPL case, the Tribunal held that the benefit of the notification cannot be denied for damaged goods if there is no intention to divert them for other purposes.

4. Consequently, the impugned order was set aside, and the appeal was allowed. The appellants were granted entitlement to consequential relief in accordance with the law. The decision was pronounced in the open court, affirming the appellant's right to the benefit under the notification for the damaged quantity of crude palm oil.