Customs exemption for windmill parts upheld where goods were actually used in assembly and installation at site.

Import of wind turbine blades and related parts qualified for basic customs duty exemption where the exemption conditions required a certificate and undertaking that the goods would be used for the specified purpose. In a turnkey windmill project, the goods were actually deployed in the assembly, manufacture and installation of the wind operated electricity generator at the customer's site, which satisfied the condition. Mere invoicing or movement of the goods to the customer's premises did not, by itself, establish breach of the exemption requirement. The demand based on alleged non-fulfilment of the condition therefore could not be sustained, and the departmental appeal failed.

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Issues: Whether the respondent was entitled to Basic Customs Duty exemption in respect of imported wind turbine blades and other parts under Notification No. 21/2002-Cus. and Notification No. 12/2012-Cus., or whether the benefit stood denied for alleged non-fulfilment of the condition requiring use of the goods for the specified purpose.

Analysis: The exemption conditions required a prescribed certificate and an undertaking that the imported goods would be used for the specified purpose. The goods were imported for manufacture and installation of wind operated electricity generators under separate supply and erection contracts. The record showed that the blades and related parts were used in the assembly and commissioning of the windmill at the customer's site, which was the practical and intended mode of use in such projects. The mere fact that the goods were invoiced or moved to the customer's premises did not establish a breach of the condition, because the importer retained the contractual responsibility of assembling and installing the windmill and the goods were actually deployed only for that purpose.

Conclusion: The condition of using the imported goods for the specified purpose was satisfied, and the denial of exemption was not justified.

Final Conclusion: The demand based on alleged violation of the exemption conditions could not be sustained, and the departmental appeal failed.

Ratio Decidendi: For exemption conditions requiring use of imported goods for a specified purpose in a turnkey windmill project, actual deployment of the goods in manufacture, assembly and installation at the customer's site satisfies the condition, and mere sale or invoicing does not by itself defeat the exemption.

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