Conditional customs exemption fails where delayed end-use proof and claimed revenue neutrality do not satisfy prescribed requirements.

Conditional customs exemption under Notification No. 83/90-Cus required timely use of the imported heavy melting scrap in manufacture, compliance with the bond obligation, and any necessary time extension. The text states that a delayed end-use certificate, produced long after import, did not by itself prove compliance with those conditions, so the exemption was not available. It also states that a plea of revenue neutrality did not override non-fulfilment of the exemption requirements, because asserted credit availability did not displace the duty demand. On that basis, the exemption claim failed and the duty demand was sustained.

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Issues: (i) whether the appellant was entitled to the benefit of exemption under Notification No. 83/90-Cus dated 20.03.1990 in respect of imported Heavy Melting Scrap; (ii) whether the demand could be avoided on the ground of revenue neutrality.

Issue (i): whether the appellant was entitled to the benefit of exemption under Notification No. 83/90-Cus dated 20.03.1990 in respect of imported Heavy Melting Scrap.

Analysis: The exemption was conditional and required the imported goods to be used in manufacture within the prescribed period, extension of time where necessary, and compliance with the bond requirement. The majority held that mere production of an end-use certificate after a long delay did not establish the requisite compliance. The condition of exemption had to be satisfied as prescribed, and the benefit could not be extended on the basis of late compliance alone.

Conclusion: The appellant was not entitled to the benefit of Notification No. 83/90-Cus.

Issue (ii): whether the demand could be avoided on the ground of revenue neutrality.

Analysis: The majority held that the plea of revenue neutrality did not assist the appellant in the facts of the case. The claimed availability of credit did not displace the duty demand arising from non-fulfilment of the exemption conditions.

Conclusion: The plea of revenue neutrality was rejected.

Final Conclusion: The exemption claim failed and the duty demand was sustained, resulting in dismissal of the appeal.

Ratio Decidendi: A conditional exemption can be availed only on compliance with its prescribed substantive requirements, and a delayed end-use certificate or asserted credit availability does not by itself establish entitlement to the exemption or defeat the duty demand.

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