Strict compliance with exemption conditions denied relief where certificate was missing at clearance and goods were outside the notification.

Conditions attached to an exemption notification must be strictly complied with. The required certificate had to be produced at the time of clearance, and obtaining it only after investigation did not cure the defect; the exemption was therefore not available. Optical fibre and optical cable supplied in running lengths were not treated as accessories or spare parts within the notification, so they also fell outside the exemption. Because the exemption was claimed despite non-fulfilment of the prescribed condition and the non-disclosure of the missing certificate supported suppression, the demand was held not to be time-barred. The exemption order was accordingly set aside and the duty demand sustained.

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Issues: (i) Whether the benefit of Notification No. 10/97-CE could be denied for non-production of the required certificate at the time of clearance of the goods and for obtaining it only after investigation; (ii) Whether optical fibre and optical cable in running length could be treated as accessories or spare parts covered by the notification; (iii) Whether the demand was barred by limitation.

Issue (i): Whether the benefit of Notification No. 10/97-CE could be denied for non-production of the required certificate at the time of clearance of the goods and for obtaining it only after investigation.

Analysis: The notification required production of a certificate from the specified competent authority at the time of clearance. The certificate was not produced when the goods were cleared, and the invoices themselves showed that the exemption was being claimed. The certificate was applied for only after investigation had begun. The condition was therefore not satisfied in time, and the requirement was not a mere procedural formality.

Conclusion: The exemption was correctly denied for non-compliance with the notification condition.

Issue (ii): Whether optical fibre and optical cable in running length could be treated as accessories or spare parts covered by the notification.

Analysis: The notification extended only to scientific and technical instruments, apparatus, equipment, and their accessories and spare parts. Optical fibre cables supplied in running lengths of about 88 km did not answer that description on the facts found.

Conclusion: The goods were not covered by the exemption as accessories or spare parts.

Issue (iii): Whether the demand was barred by limitation.

Analysis: The exemption was claimed despite non-fulfilment of the prescribed condition, and the material fact regarding absence of the certificate at clearance was not disclosed. In these circumstances, the allegation of suppression with intent to evade duty was sustainable.

Conclusion: The demand was not time-barred.

Final Conclusion: The order granting exemption was set aside, and the duty demand was sustained on the basis of non-compliance with the notification conditions, ineligibility of the goods for exemption, and absence of limitation bar.

Ratio Decidendi: Conditions attached to an exemption notification must be strictly complied with, and exemption cannot be claimed where the prescribed requirement is fulfilled only after investigation or where the goods do not fall within the notification.

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