1995 (7) TMI 221 - AT - Customs

Exemption to goods on the basis of country of origin - Clearance and Removal - Distinction between

Summary

Issues:
- Import of phosphoric acid for manufacturing fertilizers.
- Exemption notification No. 236/89-Cus. and rules of origin.
- Denial of benefit due to failure to claim exemption at the time of importation.
- Interpretation of notification and rules for claiming exemption.
- Compliance with essential requirements for exemption.
- Applicability of past judgments and orders.
- Distinction between removal and clearance of goods.
- Substantive compliance with the requirement of exemption notification.

Analysis:
The case involved appeals against the order of Collector of Customs (Appeals) concerning the import of phosphoric acid for fertilizer manufacturing. The appellants imported phosphoric acid in various consignments and filed bills of entry for clearance provisionally. The issue arose when the Government issued Notification No. 236/89-Cus., granting partial exemption to phosphoric acid for fertilizer manufacturing. The appellants claimed they fulfilled all requirements of the exemption notification before final assessment and were entitled to the benefit. However, the Assistant Collector and Collector (Appeals) denied the benefit, stating it should have been claimed at the time of importation.

The key contention was whether the appellants complied with the conditions of the exemption notification and rules of origin. The appellants argued that they indicated Morocco as the country of origin in the bill of entry and submitted a certificate of origin later in the prescribed form. They also cited previous Tribunal orders where benefits were allowed even if not claimed strictly at the time of importation. The Department, however, emphasized the requirement of strict compliance with the rules and notification for claiming the benefit.

The Tribunal observed that while the benefit was expected to be claimed at the time of importation, the touchstone for importation was the clearance for home consumption. The appellants had indicated Morocco as the country of origin and submitted a certificate to that effect before final assessment. The Tribunal noted a distinction between removal and clearance of goods, emphasizing that final assessment and out of charge order signify clearance for home consumption. Considering substantive compliance with the exemption requirements and past Tribunal orders, the appeals were allowed, granting the benefit of the exemption to the appellants.