Customs exemption on utilisation certificates may be allowed after verification, with delay in furnishing them condonable in fit cases.

Exemption under Notification No. 148/94-Cus. could be extended where the imported materials were shown, through State Government utilisation certificates, to have been distributed to poor and needy persons. The Tribunal held that the exemption claim could be accepted in principle, subject to verification of the certificates by the Original Authority before grant of relief. It also treated the delay beyond the prescribed six-month period for furnishing the utilisation certificates as condonable in a fit case. The matter was therefore remanded for verification, with the delay condoned to enable consideration of the exemption claim.

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Issues: Whether the exemption under Notification No. 148/94-Cus. could be granted on production and verification of utilization certificates, and whether delay beyond the prescribed period for furnishing such certificates could be condoned.

Analysis: The imported materials were stated to have been distributed to poor and needy persons in terms of the notification, and certificates issued by the State Government authorities were produced as proof of such utilization. In these circumstances, the lower authorities' orders were set aside and the matter was sent back to the Original Authority for verification of the utilization certificates before granting the exemption. The Tribunal also found the case fit for condoning the delay beyond the six-month period prescribed for producing the certificate.

Conclusion: The exemption claim was accepted in principle, subject to verification of the certificates, and the delay in producing them was condoned.

Final Conclusion: The appeal succeeded by way of remand, with relief granted to enable exemption after verification of compliance.

Ratio Decidendi: Where compliance with an exemption notification is supported by official utilization certificates, the delay in furnishing such certificates may be condoned in a fit case and the exemption allowed after verification.

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