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AI Drafter - (New and Powerful) ✕ Generate professional replies, appeals, opinions to Show Cause Notices, assessment orders, audit objections, and other legal communications using TaxTMI's AI Drafter.
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Issues: Whether clearing imported capital goods to a job worker's premises for processing disentitled the assessee from the benefit of the customs exemption notifications and justified denial of permission on the ground that the goods were not used in "his factory".
Analysis: The Tribunal followed its earlier decisions holding that, for the purpose of the exemption notifications, the expression "his factory" must be understood as the factory where the importer proposes to use the imported goods in the course of manufacture, and that strict insistence on ownership of the premises is unwarranted. It was also applied that a literal reading which produces an unjust result should not be adopted where the notification is intended to extend concessional treatment to manufacturing activity. On that basis, merely sending the goods to a job worker for the prescribed activity did not justify denial of the notification benefit or the requested permission.
Conclusion: The denial of exemption and permission was unsustainable; the appeals were allowed in favour of the assessee.
Ratio Decidendi: For a customs exemption notification governing imported goods for manufacture, "his factory" may include the premises where the importer actually uses the goods through a job worker, and such temporary clearance to a job worker does not by itself forfeit the exemption.
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