Customs exemption denied where coating process was not manufacture and no new commercial commodity emerged

The exemption under Notification No. 53/97-Cus. was denied for imported goods used in articles within a 100% Export Oriented Unit because the relevant coating process was held not to amount to manufacture. As no different commercial commodity came into existence, the statutory condition for availing the notification was not satisfied. The refund claim therefore failed.

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Issues: Whether the benefit of Notification No. 53/97-Cus. was available to the imported goods used for articles within a 100% Export Oriented Unit.

Analysis: The exemption under the notification was claimed on the basis that the imported goods were used for the purpose contemplated by the notification. The Tribunal relied on its earlier view that the relevant coating process did not amount to manufacture and that no different commercial commodity came into existence. In that situation, the condition for availing the exemption was not satisfied.

Conclusion: The benefit of Notification No. 53/97-Cus. was not available, and the claim for refund failed.

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