Exemption for imported zinc oxide sustained where records showed manufacture of pre-calcined ferrite powder and captive use.

Imported Zinc Oxide qualified for exemption where the record showed its use in manufacturing Pre-Calcined Ferrite Powder under Notification No. 25/1999-Cus, as amended. Jurisdictional verification, investigation materials, contemporaneous field reports, and the amended registration certificate supported actual manufacture during the relevant period. The materials also showed that the powder was partly cleared in the open market and partly used captively for ferrite products. On that basis, the contrary finding that no Pre-Calcined Ferrite Powder was manufactured could not be sustained, and the exemption benefit was available.

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Issues: Whether the imported Zinc Oxide was used in the manufacture of Pre-Calcined Ferrite Powder so as to avail the exemption under Notification No. 25/1999-Cus dated 28.02.1999 as amended by Notification No. 26/2002-Cus dated 01.03.2002.

Analysis: The record showed that the jurisdictional officers verified the manufacturing process and reported that the appellant manufactured Pre-Calcined Ferrite Powder using the imported Zinc Oxide. The investigation materials also indicated that the powder was partly cleared in the open market and partly used captively for manufacture of ferrite products. The contemporaneous reports from the field formation and the amended registration certificate supported the existence of such manufacture during the relevant period. On that basis, the finding that no Pre-Calcined Ferrite Powder was manufactured could not be sustained.

Conclusion: The appellant was held entitled to the benefit of the exemption notification, and the demand raised by denying that benefit was set aside.

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