Customs exemption for import of raw material upheld where small-scale industry status and manufacturing need were certified.

Entitlement to a customs exemption notification for import of polyacetal resin for manufacture of video cassettes turned on the petitioners' compliance with the small-scale industries certification and the certification that the raw material was required for the stated manufacture. The authorities had not completed assessment or cleared the bills of entry, and no effective justification was shown for denying the duty benefit. Any doubt about the petitioners' capacity to consume the imported goods was also removed when the import quota was increased. On that basis, the exemption applied and the consignment was to be cleared without denial of the customs benefit.

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Issues: Whether the petitioners were entitled to the benefit of the customs exemption notification for import of polyacetal resin for manufacture of video cassettes.

Analysis: The petitioners held the requisite small scale industries certificate and had secured certification that the imported raw material was required for manufacture of video cassettes. The authorities did not complete the assessment or clear the bills of entry, and no effective justification was shown for denying the exemption. Any doubt regarding the petitioners' capacity to consume the imported goods stood removed when the import quota was increased.

Conclusion: The petitioners were entitled to the exemption notification and clearance of the consignment without denial of duty benefit.

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