Actual-user import policy limits yarn imported for job-work conversion into intermediate components rather than immediate raw material.

Imported polyester filament yarn was considered too remote to qualify as the importer's immediate raw material for zip fastener manufacture, because the yarn was first converted through job work into tapes and sewing threads. The analysis treated the tape, not the yarn, as the relevant component of the final product and noted that this physical transformation meant the importer was not the actual user of the yarn for direct manufacture. It also read the relevant import policy paragraph as indicating that users of yarn were expected to source their requirements through the canalising agency. On that basis, the claimed OGL benefit and exemption were said to be unavailable.

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Issues: Whether polyester filament yarn imported for conversion into tapes and sewing threads on job-work basis qualified for import under OGL as the importer's actual-user requirement and immediate raw material for the manufacture of zip fasteners.

Analysis: The importer's case rested on the policy definition of actual user and the permissibility of sending raw materials outside the factory for processing. The deciding authority held that the relevant component for zip fasteners was the tape and not the yarn, and that the job-work conversion of yarn into tapes altered its physical form. On that reasoning, the yarn could not be treated as an immediate raw material for the end product. The authority also treated paragraph 6 of Appendix 10 as indicating that users of yarn were expected to obtain their requirement from the canalising agency.

Conclusion: The import of polyester filament yarn was not permissible under the claimed OGL benefit, and the denial of the exemption was upheld against the assessee.

Final Conclusion: The appeal failed and the customs order was confirmed.

Ratio Decidendi: Where imported material is only an antecedent input processed through job work into an intermediate component, and the importer is not the actual user of that material for the final manufacture, the import does not qualify as immediate raw material under the relevant import policy benefit.

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