Exemption for motor vehicle parts used in excisable manufacture supported a prima facie case and stay of duty recovery.

Motor vehicle parts classifiable under Tariff Item 68 were treated as prima facie eligible for exemption when used in the manufacture of excisable goods and when the Chapter X procedure had been complied with. On the facts noted, the parts were used in the manufacture of I.C. engines, and the tribunal recorded prima facie satisfaction that the applicants fell within the notification. A prior similar stay order was also noted in support of that view. The applicants therefore established a prima facie case for exemption and were granted unconditional stay of recovery of duty and penalty.

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Issues: Whether the applicants were prima facie entitled to exemption for motor vehicle parts used in the manufacture of excisable goods under the relevant exemption notification and Chapter X procedure, so as to justify stay of recovery of duty and penalty.

Analysis: The exemption was treated as applicable where motor vehicle parts classifiable under Tariff Item 68 were used in the manufacture of excisable goods and the Chapter X procedure had been complied with. On the facts noted, the parts were used in the manufacture of I.C. engines, which are excisable goods, and the Tribunal recorded prima facie satisfaction that the applicants fell within the scope of the notification. The earlier similar stay order was also noticed in support of the same prima facie view.

Conclusion: The applicants were held to have a prima facie case for exemption and were granted unconditional stay of recovery of duty and penalty.

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