End-use certificate compliance under customs exemption notification required fresh verification before penalty, confiscation, and demand could stand.

Compliance with the end-use condition in a customs exemption notification required verification of whether end-use certification had been properly pursued and issued through the jurisdictional officer. The importer had produced the certificate for part of the goods and had caused applications to be made by the buyers for the remaining quantity, so non-issuance could not be treated as a failure attributable to the importer without examining the certification record. The demand, confiscation, redemption fine and penalty were therefore not sustainable on the existing record, and the matter was remanded for fresh adjudication after verification of the buyers' applications and the status of end-use certification.

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Issues: Whether the importer's claim of compliance with the end-use condition attached to the customs exemption notification was established, and whether the matter required fresh adjudication on the basis of the buyers' applications for end-use certification.

Analysis: The imported scrap was cleared under Notification No. 21/2002-Cus. subject to a condition that the goods be used for the specified purpose and that an end-use certificate be produced through the jurisdictional Central Excise officer. The record showed that the appellant had furnished the certificate for part of the quantity and had caused applications to be made by the buyers for the balance quantity. Since issuance of the end-use certificate depended on verification by the proper officer and the importer could not do more than pursue the application, the demand, confiscation, redemption fine, and penalty could not be sustained without proper examination of the certification issue.

Conclusion: The impugned order was set aside and the matter was remanded to the adjudicating authority for fresh decision after verification of the buyers' applications and the status of end-use certification.

Ratio Decidendi: Where compliance with an exemption notification depends on issuance of an end-use certificate by the jurisdictional officer, an importer who has applied for such certificate cannot be penalized for its non-issuance without proper verification; the matter must be examined afresh on the factual record.

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