Concessional import exemption survives inter-unit transfer when goods are used for intended manufacture and no misuse is shown.

Concessional import benefit under an exemption notification cannot be denied merely because imported goods were transferred to another factory of the same importer, where the goods were still used for the intended manufacturing purpose. The record showed that the department was informed, permission was sought through the jurisdictional officer, and the movement and receipt of the goods were evidenced. In the absence of any express prohibition in the notification or governing rules, and with no proof of misuse, the procedural transfer did not defeat the substantive condition of intended use. The Tribunal applied a purposive construction and upheld the concession.

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Issues: Whether exemption under the concessional import notification and the governing rules could be denied merely because the imported goods were transferred to another factory of the same importer, and whether such transfer defeated the condition of use for the intended purpose.

Analysis: The goods were imported under the concessional notification for use in manufacture, and the governing rules were meant to enable monitoring of utilisation. The transfer to the Gurgaon unit occurred in the context of labour unrest, the department had been informed, permission was sought through the jurisdictional officer, and the record showed receipt and movement of the goods. The use at another unit of the same assessee was not shown to be for any purpose outside the notification, and neither the notification nor the rules expressly prohibited such use. The decision turned on a purposive construction of the exemption, treating procedure as subordinate to the substantive object of intended use.

Conclusion: The transfer was not a ground to deny the concession, and the order granting relief to the assessee was upheld.

Final Conclusion: The appeal failed, and the concession was sustained because the goods were held to have been used for the intended purpose despite the inter-unit transfer.

Ratio Decidendi: Where imported goods covered by a concessional import scheme are in fact used for the intended manufacturing purpose, exemption cannot be denied solely for procedural non-compliance or because the goods were used at another unit of the same importer in the absence of any express prohibition or proof of misuse.

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