End-use exemption survives damage to imported inputs when goods were intended for the specified manufacture.

End-use exemption for Tin Mill Black Plate imported for manufacture of electrolytic tin plates was not forfeited merely because some damaged coils were later sold after becoming unusable. The record supported that the goods were imported for the specified manufacturing purpose, and flood damage left part of the consignment rusted and unsuitable for tin plating. The controlling principle applied was that incidental non-use or scrap arising from damage does not by itself defeat an end-use exemption where the import was intended for the covered manufacture. The concessional duty benefit was therefore sustained and the Revenue challenge failed.

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Issues: Whether the benefit of the concessional exemption notification for Tin Mill Black Plate imported for manufacture of electrolytic tin plates was deniable merely because a portion of the imported goods was sold after damage and not used in the manufacture.

Analysis: The imported coils were found to be rusted and damaged, and the record did not rebut the claim that they had been rendered unsuitable for tin plating due to flood damage. The controlling principle applied was that where input material covered by an end-use exemption is imported for manufacture, the benefit is not lost merely because some quantity cannot be so used owing to damage, particularly when the entire import was intended for the specified manufacturing purpose. The reasoning followed the earlier view that incidental scrap or unusable quantity does not defeat the exemption when the goods were brought in for the covered manufacture.

Conclusion: The exemption benefit was correctly extended and the Revenue's challenge failed.

Final Conclusion: The order of the lower appellate authority granting the concessional duty benefit was sustained and the Revenue appeal stood rejected.

Ratio Decidendi: Where imported goods covered by an end-use exemption are shown to have been intended for the specified manufacture, loss of utility due to damage does not by itself forfeit the exemption if the factual matrix establishes that the import was for the covered purpose.

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