Chapter X concessional clearances: manufacturer not liable for duty merely because consignee's receipt was unproved.

Duty could not be fastened on a manufacturer for consignments cleared under Chapter X at concessional rate merely because the consignee's receipt was not proved. Where goods were despatched to consignees holding valid L 6 licences and executing bonds for due accountal, control passed from the consignor on despatch, and post-despatch liability did not attach to the manufacturer absent a specific bond binding the consignor for that eventuality. The Revenue's remedy lay against the consignee under the bond unless it showed that the manufacturer had undertaken corresponding responsibility. On these facts, duty demand against the manufacturer was not sustainable.

---

---

Issues: Whether duty could be demanded from the manufacturer for consignments cleared under Chapter X procedure at concessional rate of duty when the goods were not shown to have been received by the consignee.

Analysis: Goods cleared under Chapter X for specified industrial use were sent to consignees holding valid L 6 licences and executing bonds for due accountal. Once the manufacturer despatched the goods to such a consignee, control over the goods passed away from the consignor, and there was no legal basis to fasten post-despatch liability on the manufacturer merely because receipt at the consignee's end was not proved. The security for compliance lay in the consignee's bond, unless the Revenue showed that the consignor himself was bound by a bond covering such eventuality.

Conclusion: Duty could not be demanded from the manufacturer in these facts, and the issue was decided in favour of the assessee.

---