Exemption for tele-communication wires turns on exclusive design and suitability, not proof of actual end use in every case.

Exemption under Notification No. 173/68 was available where the goods were technically designed and suited only for tele-communication use, and incapable of other use. The decisive factor was the exclusive suitability of the wires and cables for the specified purpose, supported by unrebutted technical evidence. Actual end-use proof or an end-use certificate was not required in every case, particularly where goods moved through dealers and departments and their identity was lost in storage. The notification was therefore to be applied on the basis of design and capability, not rigid proof of actual consumption.

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Issues: Whether the assessee was entitled to the exemption under Notification No. 173/68 on the basis that the wires were designed and capable of use only as tele-communication wires and cables, and whether proof of actual end use was for the benefit of the notification.

Analysis: The goods were found to be technically suited only for tele-communication purposes and incapable of other use, and the evidence supporting that position was not controverted. The difficulty in correlating each clearance with the actual ultimate user was also recognised, since the consignments moved through dealers and Government departments and had lost their identity in storage. On that basis, the deciding factor for exemption was held to be the capability and design of the goods for the specified use, not insistence on an end-use certificate or proof of actual use in every case.

Conclusion: The assessee was entitled to the exemption, and the insistence on proof of actual use was rejected.

Ratio Decidendi: Where an exemption notification turns on goods being designed and suited for a specified use, exemption cannot be denied merely because actual end-use proof is not available, if the technical evidence shows exclusive suitability for that use.

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