Actual User licence limits exclude consumable cutting tools used through jobbing units for replacement gear making.

Consumable metal cutting tools imported by an actual user under an automatic licence did not fall within the policy concept of "Actual User" merely because they were used through jobbing units to make replacement gears. The tools were not raw materials or components sent out for conversion into an intermediate product, so the activity was not "intermediate processing" as contemplated by the earlier Tribunal rulings. Those rulings were therefore inapplicable, the Collector (Appeals) had erred in allowing the claims, and the revenue's appeal succeeded.

---

---

Issues: Whether consumable metal cutting tools imported by an actual user under an automatic licence could be cleared for use through jobbing units, and whether such use fell within the policy concept of "Actual User".

Analysis: The imported goods were consumable tools and not raw materials or components requiring intermediate processing. The earlier Tribunal decisions concerned raw material imported by actual users and conversion of that material into an intermediate product on job-work basis before use in manufacture. Here, the tools were not sent out for conversion into an intermediate product; they were used through jobbing units for making gears to replace worn-out gears in the factory. That activity did not amount to "intermediate processing" within the definition of "Actual User".

Conclusion: The earlier Tribunal ruling was inapplicable, the Collector (Appeals) erred in allowing the appeals, and the revenue's appeal succeeds.

---