9911796707
TMI Blog2025 (1) TMI 995X X X X Extracts X X X X X X X X Extracts X X X X ..... cking material for finished goods locally. The inputs and parts are currently imported at Delhi Air Cargo (INDEL 4). 3. The said activity is duly stated in the object clause of Memorandum of Association of the Applicant. The relevant excerpt of the Memorandum of Association is reproduced below : "To carry on the business of manufacturing, assembling, processing marketing or sales of displays...." 4. In relation to the imported inputs and parts, the Applicant is currently availing the benefit under Notification No. 57/2017-Customs, dated, 30th June, 2017 (hereinafter referred to as 'exemption notification'), which provides for 'nil' rate of duty on import of inputs and parts for use in manufacturing of Display Assembly for use in manufacture of cellular mobile phones. Relevant entry of the exemption notification is furnished below for ease of reference : S. No. Chapter or Heading or Sub-heading or tariff item Description of goods Standard rate Condition No. 5D Any Chapter Display Assembly for use in manufacture of cellular mobile phones 10% 1 Inputs or parts for use in manufacture of items mentioned at (a) above Nil 1 Inputs or sub-parts for use in manufacture o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... definition of 'applicant' as provided under Section 28E(c)(i) of the Customs Act for making this application. Question raised in the application for advance ruling by the Applicant squarely falls within the ambit of Section 28H(2)(a) of the Customs Act 11. Section 28H of the Customs Act provides for the questions in respect of which an advance ruling may be sought by an applicant. Section 28H of the Customs Act reads as under : "28H. Application for advance ruling. - (1) An applicant desirous of obtaining an advance ruling under this Chapter may make an application in such form and in such manner and accompanied by such fee as may be prescribed, stating the question on which the advance ruling is sought. (2) The question on which the advance ruling is sought shall be in respect of. - (a) classification of goods under the Customs Tariff Act, 1975 (51 of 1975); (b) applicability of a notification issued under sub-section (1) of section 25, having a bearing on the rate of duty; (c) the principles to be adopted for the purposes of determination of value of the goods under the provisions of this Act; (d) applicability of notifications issued in resp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se, have not already been decided by the Appellate Tribunal or any court in the Applicant's case. 16. Accordingly, the present application should not be considered as pending before any Court as neither the show cause notice has been issued nor the bill of entries has been provisionally assessed. 17. Thus, relying on the above the facts of the current case. Applicant submits that in its case, the application shall be accepted for hearing on merits by the Hon'ble CAAR. 18. The Applicant wishes to obtain the advance ruling on the questions listed down in form CAAR -I (as also appearing in Annexure II). Hence, the Applicant has proceeded to file this application before the Hon'ble CAAR, New Delhi for kind consideration. STATEMENT CONTAINING APPLICANT'S INTERPRETATION OF LAW AND/OR FACTS, AS THE CASE MAY BE, IN RESPECT OF THE QUESTION(S) ON WHICH ADVANCE RULING IS REQUIRED ON THE BASIS OF THE FACTS SUBMITTED IN ANNEXURE-I, THE APPLICANT RESPECTFULLY SUBMITS AS UNDER 1. The Applicant is presently engaged in the business of manufacturing of display assemblies used in the manufacturing of mobile phones (hereinafter referred to as 'display assemblies'). For manufacturing of display as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... th its grammatical variations and cognate expressions, means bringing into India from a place outside India;" 7. Section 25 of the Customs Act contains provisions regarding power to grant exemption from duty. Section 25(1) of the Customs Act reads as under : "(1) If the Central Government is satisfied that it is necessary in the public interest so to do. it may, by notification in the Official Gazette, exempt generally either absolutely or subject to such conditions (to be fulfilled before or after clearance) as may be specified in the notification goods of any specified description from the whole or any part of duty of customs leviable thereon." 8. In exercise of the powers conferred by sub-section (1) of Section 25 of the Customs Act, Central Government vide Notification No. 57/2017-Customs, dated 30th June, 2017 ('exemption notification') provided exemption from duty of Customs on import of certain goods, as mentioned therein, subject to the conditions specified in the said notification. 9. Entry No. 5D of the exemption notification reads as under : S. No. Chapter or Heading or Sub-heading or tariff item Description of goods Standard rate Cond-ition No. 5D Any Cha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es. A reference in this regard can be drawn to the object clause of the Memorandum of Association (Appendix I) of the Applicant which specifies the main objects of the Applicant and the activities that it is authorized to carry out. 16. Considering the Applicant is only engaged in manufacturing of display assemblies which are in turn used in manufacturing of cellular mobile phones, the Applicant submits that it will imports inputs and parts only for the purpose of use in the manufacturing display assemblies. The Applicant will not import any inputs or parts for any purpose other than manufacturing of display assemblies. Illustrative list of inputs and parts which will be imported for manufacturing of display assembly are as under : S. No. Description of goods Inputs and parts Chapter or Heading or Sub-heading or tariff item 1. AMOLED Panel Any chapter - Vide Notification No. 57/2017-Customs, dated 30th June 2017 2. Window Glass 3. Polarizer 4. Main - Flexible PCB 5. Touch (TSP)- Flexible PCB 6. Optically Clear Adhesive Tape 7. Anisotropic Conductive Film 8. Resins 17. In view of above, in relation to the inputs and parts proposed to be imported by the Applican ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nputs and parts which are imported for the purpose and with the intention to use in manufacture of display assemblies but get damaged during the manufacturing process and do not form part of the finished display assembly can be said to be imported for use in manufacture of display assembly. 24. At this juncture, the Applicant would like to highlight that benefit under the exemption notification is available in respect of inputs and parts ' for use' in the manufacture of display assembly and not in respect of inputs and parts ' used' in the manufacture of display assembly. 25. The usage of words for use in 'manufacture' indicates that benefit is available in respect of all inputs and parts which have been used for manufacturing the display assembly and not only in respect of inputs and parts which form part of the finished display assembly. 26. Every manufacturing process has some inherent loss which is unavoidable considering the nature of the manufacturing process. The inputs which get consumed during the manufacturing process whether by way of forming part of the final output or by way of the inherent process loss are used in the manufacturing process. 27. The phrase 'for use ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inputs and parts which are damaged during the manufacturing process should be considered as used for manufacturing of display assemblies and accordingly, benefit under Notification No. 57/2017-Customs, dated 30th June, 2017 should be available. 31. The Applicant would further like to submit that exemption available to inputs and parts for use in manufacturing of a goods should also be available in respect of inputs and parts which get scrapped during the manufacturing process, as these are used in the manufacturing of the goods. 32. The above view has also been upheld by various courts in numerous cases, few of which has been referred by the Applicant in the ensuing paragraphs. 33. The Hon'ble Supreme Court in the case of BPL Display Devices Ltd. v. Commissioner of Central Excise, Ghaziabad - 2004 (10) TMI 92 - SUPREME COURT held that benefit of the Notifications could not be denied in respect of goods which were intended for use for manufacture of the final product but could not be so used due shortage or leakage. The Apex Court further held that "We are of the view that no material distinction can be drawn between the loss on account of leakage and loss on account of damage. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that has no reference to what ultimately found part of the finished product. It is the duty paid on the input material that is relevant and not the duty referable to the ultimate component of the final product. So far as the manufacturer is concerned he has used copper and copper alloys of a particular quantity in the manufacture of pipes and tubes. The 'manufacturing loss' forms part of the raw material "used" in the manufacture though not reflected in the final product. The relief, as we understand the Notification, that has to be given to the manufacturer was in respect of the duty already paid on the raw material used in the manufacture of the final product. That is the relief has to be given to the extent of the duty paid on the input material and not with reference to the quantity which ultimately forms part of the final product." Copy of the judgment is enclosed herewith as Appendix-7. 36. In view of the above discussion, the Applicant hereby submits that it has been settled beyond doubt by numerous judgments few of which are referred above that exemption shall be available to the inputs which are scrapped during the manufacturing process even though the said inputs do no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nbsp; Para 3 (ii) Applicability of proviso (1) of Section 28-I (2) of the Customs Act, 1962 regarding the question raised in the application : As per records available in the Section, no application for the advance ruling of the applicant is pending with any officer of the Customs, other Appellate Tribunal or any Court as per proviso of Section 28(1)(2) of Customs Act, 1962. (iii) Para 3 (iii) Specify whether the claim of the applicant regarding the nature of activity, i.e. it is ongoing/proposed is correct : As per Section 28E(b) "advance ruling" means a written decision on any of the questions referred to in Section 28H raised by the applicant in his application in respect of any goods prior to its importation or exportation." 2.2 It is clear from the plain reading of the above that there should be a written decision of "advance ruling" on the questions referred by the applicant in respect of any goods prior to its importation. However, the applicant in its application has already submitted that they are already involved in importation of the referred goods i.e. "Imports of inputs and parts for use in manufacturing of display assemblies which will in turn be used in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Any Chapter (a) Display Assembly for use in manufacture of cellular mobile phones BCD @ 10% IGCR Condition No. 1 (b) inputs or parts for use in manufacture of items mentioned at (a) above BCD @ NIL IGCR Condition No. 1 2.6 As such from the reading of the provisions of the notification as amended, it is evident that there is no motif in the claim of the importer pertaining to the clarification as sought under Sl. No. 8. para- (b) as mentioned under Form CAAR-1 as submitted by the importer. Further, entry at Sl. No. 5D(b) of the Notification No. 57/2017 is silent on the aspect whether, notification benefit is available on the input or parts that get scrapped during the manufacturing process, and if, the availed customs duty exemption has to be fully reversed or reversed in proportion to the value, therefore, it may be not be possible for this office to comment on the same. 3. A personal hearing in the matter was conducted on 30-5-2024. During the personal hearing, the authorized representative of the applicant reiterated the submissions already made in their application for advance ruling on the issue of applicability of advance ruling in case of imports already made and al ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion No. 57/2017 itself provides for the exemption from Basic Customs Duty ('BCD') for import of inputs and parts used in the manufacture of display assembly. (e) The entry at Sr. No. 5D(b) of Notification No. 57/2017 is silent on the aspect of extension of the exemption of duty on the import of the input or parts that get scrapped during the manufacturing process, and if, the availed exemption has to be fully reversed or reversed in proportion to the value of the scrapped inputs. (D) in this regard, the Applicant submits that it agrees with the Ld. Assistant Commissioner in relation to the findings summarized in para 3(a), 3(b) and 3(d) above. However, the Applicant does not agree with the findings of the Ld. Assistant Commissioner as summarized in para 3(c) and 3(e) above. Therefore, the Applicant wishes to put forth its point-wise submissions justifying as to why the Advance Ruling filed by the Applicant merits consideration by your good office on merits. The submissions have been discussed in brief in the ensuing paragraphs. (II) APPLICANT'S RESPONSE TO THE LETTER DATED 21-5-2024 : (A) Eligibility under Section 28E(b) of the Customs Act : (E) Sect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sting import trade. However, it was clarified that an existing entity, which is not in the import-export business but proposes to start the business of import and export, would not be precluded from approaching CAAR for an advance ruling. (J) Thereafter during the period 2013 to 2018, there was a gradual shift and Advance Rulings could also be sought in relation to new business of import or export [Section 28E (a) of Customs Act (up to 01.04.2018) defined the term "activity" as "import or export and includes any new business of import or export proposed to be undertaken by the existing importer or exporter, as se may be."] proposed to be undertaken by the existing importer or exporter. Consequentially, advance ruling could also be sought in relation to new business of import or export proposed to be undertaken by the existing importer or exporter. For instance, an existing entity engaged in import of Model A mobile phone could now approach CAAR for an advance ruling on the proposed import of Model mobile phone. (K) Thus, up until 2018, an Advance Ruling under Customs Law' could only be filed for a particular goods before its first import or export. Hence, the interp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing application for the same goods which have been imported before or in respect of which investigation is initiated except for any case where any 'lis' is pending before any officer of customs or appellate authority in relation to the same subject matter. (Q) Further, it is trite law that principle of harmonious construction must be kept in mind while construing any statute. This principle enunciates that while interpreting any law, the statute must be read as a whole, and all the legal provisions must be read harmoniously to give effect to each word of the statute. Accordingly, to correctly interpret the intention of the legislation at hand. Section 28E(b) and Section 28-I(2) should be read together. (R) It is also pertinent to mention that it is a settled law that each import is a separate event as held in the matter of Jain Exports Pvt. Ltd. v. Union of India - 1987 (29) E.L.T. 753 (Del.) approved in 1992 (61) E.L.T. 173 (Supreme Court). Thus, usage of 'its' only further clarifies that for seeking an advance ruling every import of goods is to be treated as a separate event. (S) Accordingly, upon application of pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ld not have any implication for activities, which stand concluded." [Emphasis supplied] (V) Similarly, in the case of Sick India Private Limited (Ruling no. CAAR/Mum/ARC/47/2022, dated 27.12.2022 the CAAR authorities have held that the past SVB and DRI related investigation had no bearing for valuation methodology to be adopted for future imports and hence the application had been correctly filed. Thus, when an advance ruling application can be considered when the issue at hand is pending investigation, this ipso facto means that an advance ruling application is eligible for consideration even if the Applicant is already involved in the activity for which the advance ruling is being sought. (W) Hence, in view of the above discussion, the Applicant submits that it is eligible to make an application even in cases of on-going activity of imports, where the goods under consideration have already been imported. The ruling in such cases will have prospective effect i.e., it will be applicable on imports made after applicant moved an application for seeking an advance ruling and not on the imports already concluded. (X) Ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mobile phones 10% 1 (b) Inputs or parts for use in manufacture of items mentioned at (a) above Nil 1 (c) Inputs or sub-parts for use in manufacture of parts mentioned at (b) above Nil 1 Condition No. Conditions 1. If the importer follows the procedure set out in the Customs (Import of Goods at Concessional Rate of Duty) Rules, 2017. (CC) Upon perusal of the entry extracted above, it is clear that the exemption benefit is available to "Inputs or parts for use in manufacture of Display Assembly of cellular mobile phones". (DD) The term, "for use" mentioned in Sl. No. 5D(b) has not been defined in the Customs Act and Notification No. 57/2017. However, the Hon'ble Supreme Court and various High Courts in a catena of cases have interpreted the term "for use" to mean "intended for use" or "inputs being used in the manufacture of goods". In such a case, the courts have consistently held that damaged goods or scrapped goods are to be considered as goods used in the manufacture of the finished goods. A few of the judgments have been provided as follows : Name of the Case Citation Relevant Paragraph J. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... p; Hence, in view of the above, the Applicant is of the opinion that the exemption from BCD under Sl. No. 5D(b) of Notification No. 57/2017 is available to all inputs and parts used in the manufacture of Display Assembly irrespective of whether the same get incorporated in the manufactured Display Assembly or are damaged or scrapped during manufacturing. (GG) Further, it is trite law that an exemption notification ought to be construed strictly in order to determine the applicability of the exemption provision. However, once the exemption becomes applicable then the provisions must be construed liberally Union of India v. Wood Papers Ltd., 1990 (47) E.L.T. 500 (S.C.). In the present case, the Ld. Assistant Commissioner has itself agreed that the benefit of exemption under Sl. No. 5D(b) of the Notification No. 57/2017 is available for input and parts imported by the Applicant which are thereafter used in the manufacturing of Display Assembly of mobile phones. Hence, based on liberal construction of the exemption provision it can be said that all the imported inputs and parts which are used in the manufacture of Display Assembly, even if they are scrap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty to conclusively determine the interpretation of the exemption provision as provided under Sl. No. 5D(b) of Notification No. 57/2017. Thus, the Applicant humbly requests your good office to kindly consider the Advance Ruling Application filed by us along with its submissions made vide this letter and accordingly provide a suitable ruling. 5. I have taken into consideration of all the materials placed on record in respect of the subject goods including the submissions made by the applicant during the course of personal hearing. I have gone through the response from the Customs Port Commissionerates of ACC (Imports) Delhi. However, as the matter and questions before the Authority being the same, I therefore proceed to decide the present application regarding the eligibility of the advance ruling application, applicability of benefit of Notification, and whether the scrap generated in the process is also eligible to avail the benefit of the said Notification on the basis of the information on record as well as the existing legal framework having bearing on the interpretation of the benefit. 5.1 The Comments of the Air Cargo Complex (Import) Customs New Delhi Commissionerate with r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the "Imports of inputs and parts for use in manufacturing of display assemblies which will in turn be used in manufacturing of cellular mobile phones" is maintainable or otherwise. (ii) In this regard, it is pertinent to mention that as per the available records and the statement as submitted by the importer that they are already involved in the import of said goods wherein they are claiming the said notification benefit and further that the notification itself provides for the benefit on the said goods as mentioned above to the importers in terms of IGCR Rules. 5.5 Further, the importer, has also seek the clarification on the matter that the said notification benefit is whether available on the input or parts that get scrapped during the manufacturing process, and if not whether the availed customs duty exemption is to be fully reversed or reversed in proportion to the value. In this regard, the said matter is examined with the provisions of Notification No. 57/2017, Sl. No. 5D(b) which reads as follows : 5D Any Chapter (a) Display Assembly for use in manufacture of cellular mobile phones BCD @ 10% IGCR Condition No.1 (b) inputs or parts for use in manufacture of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... obile phones. 6.3.1 The inputs and parts, after importation as a process goes through below mentioned stages - (a) Inputs & parts quality inspection - After arrival of inputs and parts inside the Applicant factory, inputs and parts are thoroughly tested and any defective input or part is exported back to the original supplier. (b) Loss during manufacturing process - Once the inputs and parts are approved during the quality inspection such inputs and parts are moved to the assembly line for the purposes of manufacture of display assemblies. The process of manufacturing display assemblies is subject to a certain amount of process loss on account of modification of parts for the purpose of assembling, process failure, etc. At present. Applicant pays the applicable customs duty on the imported value of inputs and parts damaged during the manufacturing process. 6.3.2 It is imperative to highlight that the Applicant imports these inputs and parts only for the purpose of use in the manufacturing display assemblies. The Applicant does not import any inputs or parts for any purpose other than manufacturing of display assemblies. 6.4 It has been provided that the Applicant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of inputs or parts for use in manufacturing of display assembly which in turn will be used for manufacturing of cellular mobile phones? (b) In respect of inputs or parts imported for use in manufacturing of display assembly which get scrapped during the manufacturing process? (c) If the answer to the Question No. 1(b) above is in negative, whether the availed customs duty exemption to be fully reversed or to be reversed in proportion to the values of scrap, so generated? 6.5.1 Vide Notification No. 74/2022-Customs (N.T.), dated 9th September 2022 the Central Government in supersession of the Customs (Import of Goods at Concessional Rate of Duty) Rules, 2017 notified the Customs (Import of Goods at Concessional Rate of Duty or for Specified End Use) Rules, 2022. Rule 5 of the Customs (Import of Goods at Concessional Rate of Duty or for Specified End Use) Rules, 2022 provides for the procedure to be followed. The procedure specified in Rule 5 is furnished below for ease of reference : (1) The importer who intends to avail the benefit of a notification shall be required to mention the HN (referred to in sub-rule (2) of Rule 4) and continuity bond number and d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... une, 2017 may be available irrespective of the classification under Tariff Act of the such inputs and parts. 6.6 On the question of whether the benefit of Sl. No. 5d(B) of Notification No. 57/2017-Customs, dated 30th June 2017 (as amended) shall be available in Respect of inputs or parts imported for use in manufacturing of Display Assembly which get scrapped during the manufacturing process, the Applicant imports inputs and parts for use in manufacturing of display assemblies which in turn are used in manufacturing of cellular mobile phones. Further as discussed earlier, the inputs and parts imported by the Applicant are put on the assembly line where these are put through various assembling processes for the purpose of manufacturing of display assemblies. The process of manufacturing display assemblies is subject 'to a certain amount of process loss on account of modification of parts for the purpose of assembling, process failure, etc. The inputs and parts damaged during the manufacturing process are scrapped by the Applicant. The scrap generated during the manufacturing process are sold to the Government authorised e-waste vendors who are empanelled with the Applicant. The e-w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s being used in the manufacture of goods' in light of Section 8(3)(b) of the Central Sales Tax, 1956 in the case of J.K. Cotton Spinning & Weaving Mills Co. Ltd. v. Sales Tax Officer, Kanpur and Anr. - AIR 1965 SC 1310 held that if any process is integrally connected with the ultimate production of goods so much so that but for the said process, manufacture of goods would be commercially inexpedient, goods used as inputs in that process would fall within the ambit of the expression 'used in the manufacture of goods' and such inputs will be considered as being part of the final manufactured product irrespective of the fact that they are physically not present in it. (ii) Similar view was also upheld by the Hon'ble Madras High Court in the case of M/s. Rupa & Co. Limited, Tirupur v. The Customs, Excise and Service Tax Appellate Tribunal, The Commissioner of Central Excise, 2015 (324) E.L.T. 295 (Mad.) wherein the Hon'ble High Court allowed the CENVAT credit against the entire inputs used by the assessee even when there was 5% manufacturing process loss. The Hon'ble High Court observed as under. "13. To say that what is contained in finished product is only a quantity ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... other purposes and had no intention to use the same for manufacture of the specified items at any stage." (ii) Similarly in the case of Steel Authority of India Ltd. v. Collector of Central Excise 1996 (7) TMI 147 - SUPREME COURT the Hon'ble Supreme Court dealt with the question whether exemption available to raw naphtha intended for use in the manufacture of fertiliser would be available in respect of raw naphtha consumed for the gases vented out during the interim stages of manufacture due to unavailability of power. The Hon'ble Apex Court held as under : "There can be no doubt that the raw naphtha that was fed by SAIL into its plant was for the purpose and with the intention of manufacturing fertiliser and that it was only because of supervening circumstances, namely, the low, uncertain and fluctuating availability of power, that the reformed gas produced during the interim stage of manufacture had to be vented out. The benefit of the exemption notification is, therefore, available to SAIL in regard to the raw naphtha that it utilised in its plant for the manufacture of fertiliser but which, for reasons over which it had no control, did not, in fact, result ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6.7.1 The Applicant understands that the Commissioner has interpreted the phrase "in respect of any goods prior to its importation or exportation" to mean that an Advance Ruling Application can only be filed for any goods prior to its first importation or exportation. In view of the above, the Applicant wishes to submit that the interpretation of the definition of term "advance rulings" as adopted by the Port Commissionerate does not seem to be correct. However, major amendments were carried out to the scheme of advance rulings vide the Finance Act, 2018, including the amendment of the definition of "advance ruling"- "a written decision on any of the questions referred to in Section 28H raised by the applicant in his application in respect of any goods prior to its importation or exportation. Thus, there was a clear shift in the scope of advance ruling under the Customs law. 6.7.2 However, the meaning of the term "its" used in the definition of advance ruling under Section 28E(b) of Customs Act also needs to be looked into. This is because the term "its" does not clarify whether advance ruling can only be sought prior to first importation of a particular goods which has never been ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch stand concluded." [Emphasis supplied] 6.7.4 In view of the above discussion, the Applicant has correctly submitted that it is eligible to make an application even in cases of on-going activity of imports, where the goods under consideration have already been imported. The ruling in such cases will have prospective effect i.e., it will be applicable on imports made after applicant moved an application for seeking an advance ruling and not on the imports already concluded. Accordingly, the contention of the Port Commissionerate to state that the present Advance Application Ruling filed by the Applicant is not eligible in terms of Section 28E(b) and merits rejection is completely untenable. 6.8 As far as extension of exemption under Sr. No. 5D(b) of Notification No. 57/2017 on inputs and parts which get scrapped during manufacturing of mobile phones, the Port Commissionerate has stated that the entry at Sr. No. 5D(b) of Notification No. 57/2017 is silent on the aspect of extension of the benefit of concessional rate of duty on the import of the input or parts that get scrapped during the manufacturing process. The applicant feels the interpretation of the Port Commissionerate is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xcise, Ghaziabad [2004 (10) TMI 92 -SUPREME COURT] Para 2 Multimetals Ltd. v. Assistant Collector, Central Excise [1992 (57) E.L.T. 209 (S.C.)] Para 4 6.8.3 Further, reliance may also be placed on the case of State of Haryana v. Dalmia Dadri Cement Ltd., [2004 (178) E.L.T. 13 (S.C.)], wherein the Hon'ble Supreme Court has interpreted the term "for use" mentioned in an exemption notification to mean "intended for use". The relevant excerpt of the judgment has been extracted as follows : "10. .............. On a Plain reading of the relevant clause it is clear that the expression "for use" must mean "intended for use ". If the intention of the legislature was to limit the exemption only to such goods sold as were actually wed by the undertaking in the generation and distribution of electrical energy, the phraseology used in the exemption clause would have been different as, for example, "goods actually" used or "goods used". xx xx xx 13. We are. therefore, of the view that the real question which we are called upon to determine is whether, in the present case, the cement supplied was intended for use ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... anufacture of goods. Furthermore, Rule 6 requires the importer to maintain accounts and produce before the jurisdictional commissioner indicating the goods imported which shall be put to use for manufacture of goods or for rendering output service. Here it is pertinent to highlight that even the IGCR Rules, 2022 uses the language that the imported goods shall be "put to use" for manufacture of goods. Therefore, the intent of the Rules is clear (and in alignment with the Notification No. 57/2017) i.e., to provide concessional benefit where the goods have been consumed during the manufacture process and not necessarily the goods which form part of the manufactured goods. 6.9 The applicant also submitted two additional documents including one case law [2002 (141) E.L.T. 721 (CEGAT - Delhi) in SAPA Electricals Pvt. Ltd. v. Commr. of Customs, Allahabad and one copy of Statutory Provisions under Rule 8 of Customs (Import of Goods at Concessional Rate of Duty for Manufacture of Excisable Goods) Rules, 1966 on 'Recovery of duty in certain case' to strengthen the case and requested to take them on record. First, in the cited Case Law : "3. ....... the applicants made import of electrical ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onerate to state that the present Advance Application Ruling filed by the Applicant is not eligible in terms of Section 28E(b) merits rejection is completely untenable. The answers to the questions raised by the applicant are as follows : Whether benefit of Sl. No. 5D(b) of Notification No. 57/2017-Customs dated 30th June 2017 (As amended) shall be available: (a) Question 1 : In case of import of inputs or parts for use in manufacturing of display assembly which in turn will be used for manufacturing of cellular mobile phones? Answer : Yes, the benefit shall be available in case of import of inputs or parts for use in manufacturing of display assembly which in turn will be used for manufacturing of cellular mobile phones. (b) Question 2 : In respect of inputs or parts imported for use in manufacturing of display assembly which get scrapped during the manufacturing process? Answer : Yes, the benefit shall be available in respect of inputs or parts imported for use in manufacturing of display assembly which get scrapped during the manufacturing process. (c) Question 3 : If the answer to the Question No. 1(b) above is in negative, whether the availed cust ..... X X X X Extracts X X X X X X X X Extracts X X X X
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