Subsequent sale condition for imported timber not breached by sawing logs into smaller pieces, as no new product emerged.

Cutting imported round logs into sawn timber for domestic sale did not, by itself, breach the subsequent sale condition in Notification No. 102/2007-Customs, because mere reduction in size did not create a new product or alter the timber's essential identity. The Gujarat HC treated the matter as covered by its earlier connected tax appeals and found no reason to interfere with the Tribunal's view. As a result, the exemption benefit under the notification remained intact and the departmental challenge failed.

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Issues: Whether the importer, after sawing imported round logs into sawn timber for sale in the domestic market, breached the subsequent sale condition in Notification No. 102/2007-Customs dated 14.09.2007 and whether the Department's appeal required interference.

Analysis: The appeal was treated as covered by the Court's earlier decision in the connected tax appeals, where it was held that cutting imported logs into smaller pieces did not bring into existence a new product and did not amount to breach of the notification condition, particularly where the reduction in size was necessitated for transport.

Conclusion: The challenge to the Tribunal's view was not accepted and the appeal was dismissed.

Final Conclusion: The Tribunal's order granting the benefit of the exemption notification stood undisturbed and the connected civil application also did not survive.

Ratio Decidendi: Mere sawing or reduction in size of imported timber, without a fundamental change in identity or creation of a new product, does not by itself violate the subsequent sale condition of the exemption notification.

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