End-use verification under customs exemption governs lower duty on imported industrial nylon yarn and remand was ordered.

Imported industrial nylon yarn was treated as similar to goods covered by an earlier Tribunal ruling on Notification No. 38/78 dated 1-3-1978. The absence of a clear definition of nylon tyre yarn, together with the possibility that the yarn could be used in tyre or belting manufacture, supported extending the benefit of Serial No. 8. The lower duty rate was nevertheless made conditional on proof of actual end-use, and the Assistant Collector was directed to verify that the yarn was in fact used in the manufacture of belting before granting relief. The appeal was allowed with remand for end-use verification and consequential relief.

---

---

Issues: Whether the imported industrial nylon yarn was entitled to the benefit of Notification No. 38/78 dated 1-3-1978 and, if so, whether the matter required verification of end-use before granting the lower rate of duty.

Analysis: The imported goods were held to be similar to the goods considered in the earlier Tribunal decision dealing with the same notification. On that reasoning, the absence of a clear definition of nylon tyre yarn and the possibility that the industrial yarn could be used for manufacture of tyres or belting justified extending the benefit of Serial No. 8, subject to proof that the yarn was in fact used in the manufacture of belting. The proper course was to require evidence of end-use to the satisfaction of the Assistant Collector.

Conclusion: The appeal was allowed in favour of the assessee with remand for verification of end-use and consequential relief.

---