Intended-use exemption covers job-work clearances followed by heat treatment where invoices establish subsequent supply to jute mills.

Exemption for Aluminium Baxter Flyers intended for jute mills remains available where a job worker clears them to the principal manufacturer for heat treatment before supply to jute mills, provided intended use is established to the jurisdictional officer's satisfaction. Condition 2 does not require direct supply by the job worker to a jute mill or prohibit intermediate processing. As the goods were exclusively usable in jute spinning frames and invoices showed their subsequent supply to jute mills, the intended-use condition was met. In the absence of any prescribed prior or post-clearance intimation requirement, non-intimation is only procedural and does not defeat substantive exemption entitlement.

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Issues: Whether exemption for Aluminium Baxter Flyers intended for use in jute mills was available where the job worker cleared the goods to the principal manufacturer for heat treatment and subsequent supply to jute mills, and no intimation was furnished to the jurisdictional officer.

Analysis: Condition 2 required proof to the satisfaction of the jurisdictional Deputy/Assistant Commissioner that the goods were cleared for their intended use in a jute mill. Baxter Flyers were exclusively usable in jute spinning frames, and the invoices established that, after heat treatment by the principal manufacturer, they were supplied to jute mills. The condition did not require direct supply by the job worker to a jute mill or use of the goods without intermediate processing. The notifications also prescribed no prior or post-clearance intimation requirement; absence of such intimation was, at most, a procedural breach and could not defeat substantive exemption entitlement where intended use was established.

Conclusion: The assessee fulfilled Condition 2 and was entitled to exemption; the duty demand, interest and penalty were unsustainable.

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