Limited testing use of imported rig does not breach exemption condition for permitted road construction activity.

An imported rig eligible for exemption under Notification No. 21/2002-Cus., Sl. No. 230 could not be denied the benefit merely because it was briefly used for testing. The record showed that the rig was used only to verify fitness before being put to further use in road construction, and not for the Metro project itself. Such limited testing did not violate the condition restricting the rig's use to the permitted activity, so the exemption remained available and the denial was unsustainable.

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Issues: Whether the benefit of Notification No. 21/2002-Cus., Sl. No. 230, could be denied on the ground that the imported rig was not used exclusively for road construction and was allegedly deployed for a Delhi Metro Rail Corporation project.

Analysis: The only allegation in the impugned order was that the rig was used in connection with a project work for testing. On verification of the records, the rig was found to have been used only for testing so that it could be put to further use in road construction. Such limited testing use did not amount to use of the rig for the Metro project itself. The condition of the exemption notification therefore stood complied with.

Conclusion: The denial of exemption was unsustainable and the issue is decided in favour of the assessee.

Ratio Decidendi: Limited use of an imported machine for testing its fitness before re-employment in the permitted activity does not amount to violation of a notification condition restricting its use to that activity.

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