Interpretation of DFRC licence as covering cleaning chemicals upheld exemption for imported acetone

CESTAT Ahmedabad held that acetone imported under a DFRC licence could fall within the expression "cleaning chemicals" for the purpose of Notification No. 46/2002. The licence, read with its attached item list, was construed as permitting import of cleaning chemicals generally and not only the specifically named sodium lauryl sulphate. On that interpretation, acetone was covered by the permitted class of goods, and the objection that it lacked nexus with sugar was rejected. The exemption benefit was therefore upheld and the Revenue's challenge failed.

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Issues: Whether acetone imported under the DFRC licence was covered by the expression "cleaning chemicals" so as to qualify for exemption under Notification No. 46/2002.

Analysis: The licence was examined along with the attached list of items. Although the revenue authority treated sodium lauryl sulphate as the identified cleaning agent, the licence text was found to permit import not only of that item but also of other cleaning chemicals. On that reading, acetone could be treated as falling within the permitted class of goods. The contrary objection that acetone had no nexus with sugar was not accepted, because the licence itself was construed as broad enough to cover cleaning chemicals beyond the specifically named item.

Conclusion: The imported acetone was held to be covered by the licence and the exemption benefit was upheld in favour of the assessee.

Final Conclusion: The Revenue's challenge failed, and the clearance of the imported goods under the DFRC licence stood sustained.

Ratio Decidendi: Where the licence language permits import of cleaning chemicals generally, the benefit cannot be denied merely because the particular imported item is not the specifically named cleaning agent.

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