Exemption for imported parts upheld where goods were used to assemble CD deck mechanisms and duty was paid under protest.

Imported consignments were treated as parts of a CD deck mechanism, not as a complete mechanism, because the goods received in the factory were used for production and other assembly items were separately procured. On that basis, the concessional import exemption remained available. The clearance records also showed payment of duty under protest after the notification benefit was denied, supporting refund eligibility and showing the payment was not voluntary. The commentary applies the principle that exemption cannot be denied merely because the final product was assembled from imported parts and other locally procured components.

---

---

Issues: (i) Whether the imported goods were only parts of a CD deck mechanism or constituted a complete CD deck mechanism, and whether the respondent was entitled to exemption under the relevant notification. (ii) Whether the duty was paid under protest for purposes of the refund claim.

Issue (i): Whether the imported goods were only parts of a CD deck mechanism or constituted a complete CD deck mechanism, and whether the respondent was entitled to exemption under the relevant notification.

Analysis: The imported goods were cleared against a certificate issued for concessional import of goods intended for manufacture of excisable goods. The factual report showed that the goods received in the factory were used in the production of complete CD deck mechanisms, while the remaining items required for assembly were separately procured. On that basis, the imported consignments were treated as parts and not as complete CD deck mechanisms.

Conclusion: The respondent was entitled to the benefit of the exemption notification, and this issue was decided in favour of the assessee.

Issue (ii): Whether the duty was paid under protest for purposes of the refund claim.

Analysis: The clearance documents recorded that the party was paying full duty under protest after the benefit of the notification was not given. This supported the conclusion that the duty payment was not voluntary.

Conclusion: The duty was paid under protest, and this issue was also decided in favour of the assessee.

Final Conclusion: The departmental appeal failed on both grounds, and the assessee retained the benefit of exemption and refund-related relief.

Ratio Decidendi: Where imported goods are established to be only parts used in the manufacture of the final product, exemption under the concessional import notification cannot be denied merely on an allegation that the finished mechanism was imported as such.

---