Concessional customs duty on imported batteries upheld where use in handset manufacture was shown and no diversion was alleged.

Concessional duty on imported batteries used in manufacturing mobile handsets and similar phones could not be denied where the prescribed notification conditions were satisfied and there was no allegation of diversion, non-accounting, or non-use in the intended manufacture. The objection that batteries were not an essential handset component did not justify refusing the concession, as that issue lay within customs assessment rather than central excise scrutiny. The objection based on delivery at a different address was also answered by the amended Bill of Entry. The demand was therefore unsustainable and consequential relief followed.

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Issues: Whether the demand could be sustained by denying concessional duty on imported batteries used in the manufacture of mobile handsets and similar phones and by objecting to receipt of the goods at a different address.

Analysis: The concessional notifications covered batteries imported for use in the manufacture of mobile handsets and similar phones, subject to the prescribed conditions. The record showed no allegation of diversion, non-accounting, or non-use of the batteries in the intended manufacture. The objection that batteries were not an essential part of the mobile phone did not justify denial of the benefit, and the question whether they formed part of the handset was within the domain of the customs assessing authority, not the central excise authority. The objection regarding delivery at a different address was also neutralised by production of the amended Bill of Entry.

Conclusion: The demand was not sustainable and the appeal was allowed with consequential relief to the assessee.

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