End-use conditioned customs exemption denied where importer failed to prove prescribed use of imported copper clad laminated sheets.

A customs exemption conditioned on end-use requires the claimant to prove that the imported goods were actually used for the prescribed manufacture and to maintain supporting records. On the facts noted, the appellant could not satisfactorily account for the use of 710 imported copper clad laminated sheets, so compliance with the notification's end-use condition was not established. The concessional customs duty exemption was therefore inadmissible, and the corresponding Modvat credit of additional customs duty was also not allowable.

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Issues: Whether the concessional customs duty exemption under Notification No. 13/97-Cus. could be denied for 710 imported copper clad laminated sheets on the ground that the prescribed end-use condition was not established, and whether the corresponding Modvat credit of additional customs duty was also liable to be denied.

Analysis: The exemption was available only subject to use of the imported material for manufacture of printed circuit boards and to maintenance of proper end-use records. The records did not satisfactorily account for the use of 710 sheets, and the appellant failed to prove that the goods were put to the intended use. Where exemption is conditional upon end-use, the burden lies on the claimant to establish compliance with that condition. Since the intended use was not proved, the concession was not admissible. For the same reason, credit taken on the additional customs duty relatable to those sheets was also not allowable.

Conclusion: The denial of concessional duty and denial of Modvat credit were upheld, and the appeal failed.

Ratio Decidendi: When a customs exemption is expressly conditional upon end-use, the assessee must prove compliance with that condition; failure to establish the prescribed use justifies denial of both the exemption and the consequential credit.

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