Intermediate processing on job-work basis does not defeat Open General Licence eligibility for actual user imports under import policy.

An actual user remains eligible for Open General Licence under Serial No. 1 of Appendix 10 where imported raw material is first converted into an intermediate product by an outside unit on job-work basis and then used in the importer's own manufacturing process. The policy requires the goods to be for the importer's own use and, for an industrial undertaking, to be utilised in the production process or made available for intermediate processing as part of that effort. Lack of in-house conversion facilities does not by itself take the import outside the policy, and restrictive excise concepts should not be read into the import policy.

---

---

Issues: Whether an actual user importing raw material is entitled to the benefit of Open General Licence under Serial No. 1 of Appendix 10 of the Import Policy when the raw material is first converted into an intermediate product by an outside agency on job-work basis and that intermediate product is then used in the importer's own premises for manufacture of the final product.

Analysis: The relevant policy required that the imported goods be for the importer's own use and not for business or trade, and that in the case of an industrial undertaking they be utilised in the manufacturing process or made available to outside units for intermediate processing as part of the production effort. The fact that the importer did not have in-house facilities for converting fibre into yarn did not, by itself, alter the character of the import or take the case outside the policy. The expressions used in the policy were not to be cut down by importing restrictive concepts from excise law. The certificates issued by the sponsoring and registering authorities also supported the position that the conversion on job-work basis was an intermediate process.

Conclusion: The import was covered by Serial No. 1 of Appendix 10 and the appellants were eligible for the benefit of Open General Licence. The confiscation and redemption fine were not justified.

Ratio Decidendi: Where the policy permits intermediate processing as part of the production effort, an actual user does not lose eligibility merely because the imported raw material is converted by an outside unit on job-work basis before being used in the final manufacturing process.

---