Exemption for jobbing imports upheld where goods were used in export production and re-exported to the foreign supplier.

Notification No. 32/97-Cus was available where imported goods supplied free of cost by the foreign buyer were used to manufacture goods exported back to that supplier. The notification covered imports for execution of an export order placed by the foreign supplier for jobbing, subject to re-export, use only for discharge of the export obligation, compliance with the prescribed import procedure, and satisfaction of the stated conditions. The imported goods fell within the notification's explanation and the factual record showed compliance with the export, re-export, use, and procedural requirements. The distinction between "jobbing" and "job work" was held insufficient to deny the exemption, and the duty, interest, and penalty demand could not survive.

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Issues: Whether the benefit of Notification No. 32/97-Cus was available when imported goods supplied free of cost by the foreign buyer were used in manufacture of goods that were exported back to the supplier, and whether the distinction between "jobbing" and "job work" justified denial of exemption.

Analysis: The notification permitted import of goods for execution of an export order placed by the foreign supplier for jobbing, subject to re-export of the goods or resultant products, use only for discharge of export obligation, compliance with the prescribed import procedure, and satisfaction of the other specified conditions. The imported goods fell within the explanation to the notification, and the factual findings showed compliance with the conditions regarding export order, re-export, export value, use of the goods, and adherence to the prescribed rules. The expression "jobbing" was held to have a wider connotation than "job work", and the distinction drawn by the lower authority was found unsustainable. Since the imported items were used in the manufacture of machinery that was exported to the same foreign supplier, there was no deviation from the exemption scheme.

Conclusion: The exemption under Notification No. 32/97-Cus was rightly allowed and the demand of duty, interest, and penalty could not survive.

Final Conclusion: The revenue challenge to the grant of exemption failed, and the order allowing the assessee's appeal was sustained.

Ratio Decidendi: Where the conditions of an exemption notification governing import for jobbing are satisfied and the imported goods are used in goods exported to the foreign supplier, the benefit cannot be denied merely by equating jobbing with job work.

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