Target Plus imports used through job workers are not prohibited transfers, so exemption denial and related demands fail.

Dispatch of imported goods obtained under a Target Plus duty credit scrip to a job worker for manufacture of final products did not amount to a prohibited transfer or sale under Condition 3 of Notification No. 73/2006-Cus, because the goods remained with the importer and were used through job-work for producing the resultant goods. As no violation of the exemption condition was established, denial of notification benefit was unsustainable, and the related duty demand, interest, confiscation, redemption fine and penalty could not survive.

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Issues: Whether dispatch of imported goods obtained under Target Plus duty credit scrip to a job worker for manufacture of the final products violated condition 3 of Notification No. 73/2006-Cus and, if not, whether the demand of duty, interest, confiscation, redemption fine and penalty could survive.

Analysis: Condition 3 of Notification No. 73/2006-Cus prohibits transfer or sale of the imported goods, while its proviso deals with utilisation by a supporting manufacturer in the case of a merchant exporter. The relevant Foreign Trade Policy provisions and the DGFT public notice indicate that imports for own use may be converted through job workers and that own use is not confined to direct physical use in the importer's own premises. The imported goods remained with the appellant and were sent for manufacture of the resultant products; there was no finding of sale or transfer of the goods to the job worker. The cited precedent on the same Target Plus scheme and similar condition also supports the view that use through job workers does not amount to prohibited transfer.

Conclusion: Dispatch of the imported goods to a job worker for manufacture did not violate the exemption condition. The denial of the notification benefit, the duty demand, interest, confiscation, redemption fine and penalty were unsustainable.

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