2017 (4) TMI 1127 - AT - Central Excise

Benefit of N/N. 20/99 - use of imported goods for intended purpose - import of Fibre Glass Roving at concessional rate of duty for the manufacture of Telecommunication Grade Fibre Reinforced Plastic Rods - Held that - the said Fibre Glass Roving has been used in the manufacture of Telecommunication Grade FRP which comes into existence while being extruded along with copper conductor through the bath of PVC Compound and in this process FRP and Telecommunication Cable i.e. PVC Drop Wire comes into existence simultaneously which are used in the telecommunication. Thus, the condition of the N/N. 20/99 was fulfilled - the assessee-Respondents were entitled for the exemption - appeal dismissed - decided against Revenue.

Summary

Issues involved:
Interpretation of Customs Notification No. 20/99 for import of Fibre Glass Roving, Allegation of suppression of facts, Entitlement for exemption under the notification.

Analysis:
The case involved an appeal by the Department against the order-in-appeal passed by the Commissioner of Central Excise (Appeals). The assessee-Respondents were engaged in manufacturing cables and were availing the benefit of Customs Notification No. 20/99 for importing Fibre Glass Roving at a concessional rate of duty. The Department alleged that the material was used for manufacturing ordinary drop wire with copper conductors, not for the intended purpose. The matter was remanded to the original authority, and in the second round of litigation, the Commissioner (Appeals) dropped the demand, leading to the Department's present appeal.

During the proceedings, expert reports were considered, which highlighted that the Fibre Glass Roving was used to make solid rigid fibre plastic rods for optical fibre cables, without any copper conductor. The Tribunal observed that the imported material was used in manufacturing telecommunication grade FRP, which was extruded along with copper conductor to make PVC drop wires. The Department was aware of the intended use of the imported material, as evidenced by various certificates and audit reports. The Tribunal found that the conditions of the Customs Notification were fulfilled, and the assessee-Respondents were entitled to the exemption.

The Tribunal upheld the Commissioner (Appeals) decision based on precedents and held that the Fibre Glass Roving was indeed used in the manufacture of Telecommunication Grade FRP, meeting the requirements of the notification. Consequently, the appeal filed by the Department was dismissed, and the impugned order was sustained. The judgment was pronounced in open court on a specified date.