Strict construction of customs exemption denied catalyst relief for fertilizer plant imports and defeated the refund claim.

A catalyst imported for use in a fertilizer plant was held outside Notification No. 16/2000-Cus because the exemption covered machinery, instruments, apparatus, appliances, their parts, and raw materials for their manufacture, as well as specified spare parts and consumables for renovation, modernisation or maintenance. The catalyst was treated as a chemical used to trigger a reaction, not as goods falling within those exempt categories. The notification was required to be construed strictly at the eligibility stage, and the certificate from the Department of Fertilizers could not expand the scope of the exemption. Accordingly, exemption was unavailable and the refund claim based on that exemption was not maintainable.

---

---

Issues: Whether catalyst imported for use in a fertilizer plant was covered by Notification No. 16/2000-Cus and whether the importer was entitled to refund of duty paid on denial of exemption.

Analysis: The notification exempted machinery, instruments, apparatus and appliances, parts, and raw materials for manufacture of those items, as well as spare parts and consumables required for renovation, modernisation or maintenance of a fertilizer plant. The condition attached to the exemption required a certificate from the Department of Fertilizers only to certify techno-economic clearance, recommend exemption for the specified goods, and confirm that the goods were required for the stated purpose. The catalyst in question was a chemical used to initiate a chemical reaction and was not machinery, apparatus, appliances, parts, or raw materials for their manufacture. The exemption notification had to be construed strictly at the threshold stage of eligibility, and the departmental certificate could not enlarge the scope of the notification.

Conclusion: The catalyst was not eligible for exemption under the notification, and the refund claim based on such exemption was not maintainable.

---