2007 (11) TMI 98 - AT - Customs

Manufacture has to be given a liberal meaning for export purposes DTA clearance by SEZ if benefit of concessional rate of duty u/n 2/95 has been allowed then it is not justified to demand custom duty on inputs used in curtains, powdered toners etc.

Summary

Issues:
1. Interpretation of the term 'manufacture' for export purposes.
2. Entitlement to concessional rate of duty under Notification No. 2/95-C.E.
3. Customs Duty exemption under Notification No. 133/94-Cus.
4. Application of a liberal meaning of 'manufacture' in different contexts.

Analysis:
1. The case involved a unit in a Special Economic Zone permitted to make DTA clearance of goods after fulfilling export obligations. The Department issued a show cause notice questioning the 'manufactured' status of goods for duty benefits.
2. The appellants argued for a liberal interpretation of 'manufacture' for export purposes, citing a Board's Circular. The original authority accepted this argument for concessional rate under Notification No. 2/95-C.E.
3. The appellants contended that the Adjudicating Commissioner erred in not applying the same liberal interpretation for Customs Duty exemption under Notification No. 133/94-Cus. They relied on a prior decision and argued for consistency.
4. The Tribunal found the impugned goods to be 'manufactured products' for Notification No. 2/95-C.E. The inconsistent treatment of inputs was deemed contradictory. Citing precedent decisions and a Board's Circular, a liberal interpretation of 'manufacture' was upheld, leading to setting aside the demand confirmed in the impugned Order. The appeals were allowed.

This judgment clarifies the interpretation of 'manufacture' for duty benefits in different contexts, emphasizing a liberal approach for export purposes. It highlights the importance of consistency in applying such interpretations across related notifications and products.