Exemption for imported goods cannot be denied when a manufacturing-linked condition is impossible for an importer to satisfy.

Exemption under Notification No. 30/2004-CE, as amended by Notifications Nos. 34/2015-CE and 37/2015-CE, was held available to an importer of non-textured polyester lining cloth. The governing principle applied was that an exemption condition framed with reference to manufacturing activity cannot be used to deny relief where literal compliance is impossible for an importer, provided the goods otherwise fall within the notification and the amendment does not clearly withdraw that benefit. Earlier coordinate bench decisions on identical facts were followed, and denial of the exemption was found unsustainable.

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Issues: Whether the benefit of Notification No. 30/2004-CE, as amended by Notification Nos. 34/2015-CE and 37/2015-CE, was available to the importer of non-textured polyester lining cloth, despite the departmental objection that the notification conditions were framed for manufacturers and could not be complied with by an importer.

Analysis: The notification and its amendments were read in the light of the earlier coordinate bench view and the settled principle that a condition which is incapable of compliance by an importer cannot be used to deny the exemption when the goods otherwise fall within the notification. The amended notifications were found not to override that position, and the earlier decisions extending the benefit in identical facts were followed.

Conclusion: The exemption under Notification No. 30/2004-CE, as amended, was available to the importer, and the denial of benefit was unsustainable.

Final Conclusion: The impugned orders were set aside and the appeals were allowed with consequential relief.

Ratio Decidendi: An exemption notification intended to extend relief on imported goods cannot be denied merely because a condition framed with reference to manufacturing activity is incapable of literal compliance by an importer, where the amended notification does not clearly withdraw that benefit.

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