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Refund claim under Section 74 of the Customs Act for imported machineries used in exhibition and demonstration. Analysis: The petitioner sought a refund of Rs. 91,908/- for machineries imported and re-exported under Section 74 of the Customs Act. The dispute arose regarding whether the demonstration and exhibition of the machinery amounted to the use of goods as per the provisions of Section 74(2) of the Act. The petitioner argued that exhibition and demonstration do not constitute usage of goods. The judgment in ABC India Ltd. v. Union of India [1992 (61) E.L.T. 205 (Del.)] was cited in support of this argument. The Assistant Collector of Customs determined that the instruments were indeed used during the exhibition for demonstration, which was further upheld by the Collector of Customs and Central Excise (Appeals) and the Government of India in subsequent appeals. It was established that demonstration involves the operation of imported goods, which qualifies as usage. The authorities emphasized that even a brief operation during exhibition or demonstration results in the machinery being considered as used, leading to depreciation in value. The court differentiated between display and demonstration, highlighting that operation of machinery during exhibition constitutes usage. The judgment clarified that once a machinery is operated, even for a short period during exhibition, it loses its status as a new machinery. The distinction between Sections 74 and 75 of the Customs Act was also emphasized, noting that Section 74(2) covers usage for exhibition purposes. As the machineries were operated during the exhibition, the refund claim was deemed applicable under Section 74(2) rather than Section 74(1). Ultimately, the court dismissed the writ petitions, affirming that the refund was rightfully granted as the machineries were operated during the exhibition, constituting their usage under Section 74(2) of the Customs Act. The judgment underlined that once machinery is put to use, even for demonstration purposes, it no longer retains its new status, warranting the refund claim under the appropriate section of the Act.
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