Customs exemption for stainless steel coils upheld where post-import slitting did not defeat the cold-rolling condition.

Imported hot rolled stainless steel coils remained entitled to customs duty exemption where the notification required only that the coils exceed 500 mm in width and be imported for the purpose of cold rolling. Both conditions were satisfied at import, and the post-import slitting into narrower widths did not amount to a disqualifying different use. The intermediate processing was incidental to enabling cold rolling and did not defeat the notification benefit. The denial of exemption was therefore unsustainable, and the importer was entitled to the exemption.

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Issues: Whether the imported hot rolled stainless steel coils remained entitled to exemption from customs duty under the notification when they were first slit into smaller widths before being cold rolled, although at the time of import they exceeded 500 mm in width and were imported for the purpose of cold rolling.

Analysis: The exemption notification required only two conditions: the coils had to exceed 500 mm in width and the import had to be for the purpose of cold rolling. Both conditions were satisfied. The fact that the importer slitted the coils after import, because the original width could not be directly cold rolled, did not amount to a disqualifying different use. Once the goods were imported in the qualifying width and were ultimately utilised for cold rolling, the benefit of the notification could not be denied on the ground of the intermediate slitting process.

Conclusion: The denial of exemption was unsustainable and the importer was entitled to the benefit of the notification.

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