1998 (8) TMI 224 - AT - Customs

Duty-Free Clearance Appeal Dismissed, License Description Key to Exemption Eligibility

The Tribunal dismissed the Revenue's appeal regarding duty-free clearance for imported steel wire rods under Notification No. 204/92. The Tribunal ruled ... Steel wire rods in coils imported under QABAL for use in bolts/hot forged nut Issues:1. Entitlement to duty-free clearance under Notification No. 204/92 for imported steel wire rods.2. Determination of specifications of steel used in the resultant product for duty exemption.3. Interpretation of duty exemption scheme under quantity-based advance license.4. Jurisdiction of customs authorities regarding the specifications of imported materials.Analysis:1. The case involved a dispute regarding the entitlement of duty-free clearance under Notification No. 204/92 for imported steel wire rods. The respondents imported the goods and claimed benefits under the said notification based on a quantity-based advance license. However, upon adjudication, it was held that the imported goods did not qualify for duty-free clearance under the notification.2. On appeal, the lower appellate authority ruled in favor of the respondents, noting that the specifications of the imported goods matched those mentioned in the license. The main contention raised by the Revenue was the lack of disclosure of steel specifications used in the resultant product, which could establish the necessity of the imported steel for manufacturing the final product. Citing a previous judgment, the Revenue argued that the thickness of the imported rods did not align with the thickness required for the resultant product.3. The Advocate for the respondents argued that the duty exemption scheme under the quantity-based advance license, as per Export Policy 1992-1997, did not necessitate proving the exact specifications of the material used in the resultant product. The Advocate highlighted the broader language of Notification No. 204/92 compared to earlier notifications, indicating that as long as the imported goods matched the description in the license, they were entitled to the duty exemption.4. The Tribunal, after considering arguments from both sides, agreed with the respondents' Advocate. It was emphasized that the duty exemption under Notification No. 204/92 was contingent on the specifications mentioned in the advance license. The Tribunal noted a qualitative change in the duty exemption scheme from previous notifications. Relying on precedents, the Tribunal concluded that the respondents were not required to provide details of the materials used in the resultant product to qualify for the duty exemption. Therefore, the appeal by the Revenue was dismissed based on the interpretation of the duty exemption scheme and the specifications outlined in the advance license.