Exemption notifications require strict compliance for CVD, while substantial compliance can sustain BCD relief for a 100% EOU.

A 100% EOU was treated as entitled to Basic Customs Duty exemption under Notification No. 25/1999-Cus and Notification No. 24/2005-Cus because the duty-free inputs were received, accounted for and used in manufacture, and substantial compliance with the exemption scheme was accepted. By contrast, the CVD exemption under Notification No. 6/2006-CE and Notification No. 12/2012-CE was denied for parts procured outside the factory, as the relevant entry required strict satisfaction of its specific conditions; consequential SAD relief also failed. The extended period and penalty were set aside following the earlier view in the appellant's own matter, leaving only recomputation of the surviving demand.

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Issues: (i) entitlement to exemption from BCD under Notification No. 25/1999-Cus and Notification No. 24/2005-Cus; (ii) entitlement to exemption from CVD under Notification No. 6/2006-CE and Notification No. 12/2012-CE and consequential exemption from SAD; (iii) invocability of extended period and sustainability of penalty.

Issue (i): entitlement to exemption from BCD under Notification No. 25/1999-Cus and Notification No. 24/2005-Cus

Analysis: The alternate exemption for BCD was examined in the light of earlier remand proceedings and subsequent orders in connected matters. The decisive consideration was that the appellant, being a 100% EOU, had substantially complied with the conditions underlying the import concession rules and the duty-free inputs were received, accounted for, and used in the manufacture of the exported goods. Consistency with the earlier accepted view in the appellant's own proceedings also supported the claim.

Conclusion: The appellant was held entitled to the benefit of Notification No. 25/1999-Cus and Notification No. 24/2005-Cus.

Issue (ii): entitlement to exemption from CVD under Notification No. 6/2006-CE and Notification No. 12/2012-CE and consequential exemption from SAD

Analysis: The exemption entries for non-conventional energy devices and systems were construed strictly. The parts procured from outside the factory were held not to satisfy the specific entry that extends exemption only to parts consumed within the factory of production of such parts for manufacture of the specified goods. Following the earlier decision in the appellant's own case, the exemption from CVD was denied, and since CVD was leviable, exemption from SAD also could not be granted.

Conclusion: The appellant was held not entitled to exemption from CVD and, consequently, not entitled to exemption from SAD.

Issue (iii): invocability of extended period and sustainability of penalty

Analysis: The issue was answered by following the appellant's earlier case, in which the extended period demand and penalty had been set aside. On the same reasoning, the demand for the extended period and the penalty were not sustainable in the present matter.

Conclusion: The extended period was held not invocable and the penalty was held unsustainable.

Final Conclusion: The order resulted in partial relief to the appellant: the BCD concession was allowed, the CVD and consequential SAD demand for the normal period was sustained, and the extended-period demand and penalty were set aside, with the matter sent back only for recomputation of the surviving demand.

Ratio Decidendi: An exemption notification must be applied according to its express terms and, where the conditions are specific, only strict compliance with the stipulated entry can justify the concession; however, for alternate import exemptions, substantial compliance with the governing procedural scheme may suffice where the underlying objective of the concession is otherwise met.

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