Use-based customs exemption requires credible proof of actual utilisation in the specified industry, or concessional duty is denied.

Importers claiming concessional duty under a use-based exemption must prove that the goods were actually utilised for the specified industry. The expression "for use" was treated as meaning intended for use, but the Tribunal required credible evidence of actual consumption in leather manufacturing. The register produced was rejected for inconsistencies, lack of authorship and mismatch with business records, and the chartered accountant's certificate was found insufficient because its verification basis was not disclosed. On the material on record, the importer failed to establish actual user status, so the exemption was denied and the import was treated as unauthorised and liable to confiscation.

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Issues: Whether the imported stamping foils were entitled to concessional duty under Notification No. 224/85-Cus. on the basis that they were imported for use in the leather industry, and whether the appellants had established actual user status and lawful import so as to avoid confiscation.

Analysis: The notification granted exemption to stamping foils when imported for use in the leather industry, and the expression "for use" was treated as meaning intended for use. The appellants were required to substantiate their claim by reliable evidence of actual consumption in their leather manufacturing activity. The Tribunal found that the register produced was unreliable because of discrepancies in bill of entry particulars, absence of authorship, lack of ordinary business records, and inconsistency with the claimed period of consumption. The chartered accountant's certificate was also found insufficient because the basis of verification was not disclosed and it did not credibly establish actual utilisation of the imported goods. On the departmental enquiry report and the record, the Tribunal held that the appellants had failed to prove actual use of the imported stamping foils in the leather industry.

Conclusion: The appellants were not entitled to the concessional rate of duty, were not actual users of the imported material for the specified purpose, and the import was unauthorised and liable to confiscation.

Final Conclusion: The appeal failed and the adjudication order sustaining denial of exemption and confiscation of the goods was affirmed.

Ratio Decidendi: Where exemption depends on import for use in a specified industry, the importer must establish actual utilisation by credible evidence, failing which the concessional benefit and lawful import status are not available.

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