2006 (8) TMI 219 - AAR - Customs

Whether on a plain reading of the text of the category (g) in column (2) against Serial No. 1 of the Table annexed to the Notification No. 38/96-Cus. dated 23-7-96 the goods specified therein which includes wool are entitled to get exemption from duty when imported into India from China through the specific Land Customs Stations and along the specified land routes mentioned therein? Whether the category (g) in the aforesaid exemption Notification does not have any actual user condition after the specified goods are imported?

Summary

Issues:
- Import of wool from specific stations in China for a joint venture in India
- Applicability of Customs Notifications 38/96 and 63/94 for duty-free import
- Limitations on the use and sale of imported wool

Analysis:
1. The applicant sought an advance ruling on importing wool from China for a joint venture in India, aiming to utilize Customs Notifications 38/96 and 63/94 for duty-free import. The applicant questioned the eligibility to import through specified stations and avail duty exemption, along with any restrictions on the use and sale of the imported wool.

2. The Commissioner contended that duty-free import of wool from China is restricted to local residents along specific land routes, not for commercial use by manufacturing concerns. Referring to trade regulations and border agreements, the Commissioner argued against granting duty exemption to the applicant for the intended commercial use of imported wool.

3. During the hearing, the applicant's counsel dropped the question regarding import eligibility through specific stations, focusing only on the duty-free import benefits under Notification No. 38/96. The Authority noted the Commissioner's emphasis on import restrictions but clarified that the ruling would address the general applicability of the exemption notification.

4. The Authority analyzed Notification No. 38/96, highlighting the power of the Central Government to grant duty exemptions for specified goods under the Customs Act. The exemption for wool import from China through designated land routes was found to have no additional conditions beyond the specified routes, granting duty exemption without limitations on use post-import.

5. Based on the interpretation of the exemption notification, the Authority ruled that wool imported from China through specified land routes is entitled to duty exemption as per the notification. It was clarified that the exemption notification did not impose any actual user conditions on the imported goods post-import, affirming the entitlement to duty-free import without usage restrictions.

6. The ruling on the questions (b) and (c) affirmed the entitlement of the applicant to duty exemption for importing wool from China through designated land routes, without any limitations on the use or sale of the imported goods. The ruling was pronounced on August 29, 2006, by the Authority for Advance Rulings.