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Issues: (i) Whether the appellant was entitled to concessional duty under Notification No. 110/95-Cus. when the imported capital goods were installed in the laboratory and not in the factory premises; (ii) whether the duty demand was barred by limitation.
Issue (i): Whether the appellant was entitled to concessional duty under Notification No. 110/95-Cus. when the imported capital goods were installed in the laboratory and not in the factory premises.
Analysis: The benefit of the exemption notification was conditional upon compliance with the prescribed conditions, including installation of the imported capital goods in the importer's factory. The language of the condition was held to be clear and unambiguous, leaving no scope to enlarge the notification by reading in an extended meaning of the word "factory" so as to include a laboratory. The later communication from the DGFT did not alter the Customs condition or dispense with the requirement of factory installation.
Conclusion: The appellant was not entitled to the concessional benefit under Notification No. 110/95-Cus., and the finding was against the assessee.
Issue (ii): Whether the duty demand was barred by limitation.
Analysis: The imports were made against bonds and the notification itself contemplated completion of installation within the stipulated period or such extended period as permitted. The demand arose from non-fulfilment of the end-use condition secured by bond and bank guarantee, and was not treated as a time-barred demand in the sense contended.
Conclusion: The demand was not barred by limitation, and the finding was against the assessee.
Final Conclusion: The appeal failed because the essential condition for availing the customs concession was not satisfied and the limitation objection was rejected.
Ratio Decidendi: An exemption notification must be construed strictly, and where the prescribed condition precedent for the concession is not fulfilled, the benefit cannot be extended by liberal interpretation or by reference to extraneous material.
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