Customs exemption for power-project goods turns on substantive end-use compliance, not mere procedural lapse under concessional duty rules.

Exemption under Notification No. 50/2017-Customs for specified power-project goods is stated to depend on satisfaction of the substantive end-use condition, not rigid compliance with every procedural step under the Customs (Import of Goods at Concessional Rate of Duty) Rules, 2017. Where the imported goods are shown by Chartered Engineer and end-use certificates to have been put to the intended use, procedural lapse is treated as a safeguard against misuse and not a condition going to eligibility. On that basis, denial of exemption is unwarranted, and the related duty demand, confiscation, redemption fine and penalty do not survive.

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Issues: Whether the benefit of exemption under Notification No. 50/2017-Customs dated 30.06.2017 could be denied for non-compliance with the procedure prescribed under the Customs (Import of Goods at Concessional Rate of Duty) Rules, 2017 despite fulfilment of the substantive end-use condition.

Analysis: The concessional exemption under Sl. Nos. 413 and 414 was intended for goods used for the specified power-project purposes. The imported goods were found to have been put to the intended use, supported by Chartered Engineer certificates and end-use certificates. The procedural requirement under the Customs (Import of Goods at Concessional Rate of Duty) Rules, 2017 was treated as a safeguard to prevent misuse and not as a condition going to the root of eligibility. Once the substantive object of the notification was satisfied, denial of the exemption merely for procedural non-compliance was held to be unwarranted. As the exemption was available, the confiscation and penalty provisions also did not survive.

Conclusion: The procedural lapse did not justify denial of the exemption, and the impugned duty demand, confiscation, redemption fine, and penalty were set aside in favour of the assessee.

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