Duty-free procurement under export-linked notification satisfied where intermediate goods were used in exported products, even without direct export by supplier.

Notification No. 43/2001-CE was construed to require that goods manufactured from duty-free raw materials be used for export, not that the same assessee must itself complete the export. As the intermediate goods supplied by the appellant were used in the manufacture of export goods and those goods were actually exported, the export condition was satisfied. In the absence of any finding of violation of the notification, the duty demand was held unsustainable and the objection that the appellant was not the final exporter was rejected.

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Issues: Whether duty-free procurement of raw materials under Notification No. 43/2001-CE dated 26.06.2001 was denied merely because the appellant did not itself export the intermediate goods, though such goods were used in manufacturing inputs for goods ultimately exported by another manufacturer.

Analysis: The notification was read to require that the goods emerging from the imported or duty-free raw material must be used for export, and not that the same assessee must itself be the exporter. Since the intermediate goods supplied by the appellant were admittedly used in the manufacture of export goods and those goods were actually exported, the export condition stood satisfied. In the absence of any contrary finding establishing violation of the notification, the duty demand was unsustainable.

Conclusion: The condition of Notification No. 43/2001-CE dated 26.06.2001 was held to be satisfied, and the objection that the appellant was not the final exporter was rejected. The appeals were allowed in favour of the assessee.

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