TaxTMI 
TaxTMI 
2025 (1) TMI 995
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....uts and parts. Applicant also procures packing material for finished goods locally. The inputs and parts are currently imported at Delhi Air Cargo (INDEL 4). 3. The said activity is duly stated in the object clause of Memorandum of Association of the Applicant. The relevant excerpt of the Memorandum of Association is reproduced below : "To carry on the business of manufacturing, assembling, processing marketing or sales of displays...." 4. In relation to the imported inputs and parts, the Applicant is currently availing the benefit under Notification No. 57/2017-Customs, dated, 30th June, 2017 (hereinafter referred to as 'exemption notification'), which provides for 'nil' rate of duty on import of inputs and parts for use in manufacturing of Display Assembly for use in manufacture of cellular mobile phones. Relevant entry of the exemption notification is furnished below for ease of reference : S. No. Chapter or Heading or Sub-heading or tariff item Description of goods Standard rate Condition No. 5D Any Chapter Display Assembly for use in manufacture of cellular mobile phones 10% 1 Inputs or parts for use in manufacture of it....
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....any registered in India and is holding a valid Importer-Exporter Code ('IEC') Number ABCCS3215K. Thus, the Applicant is rightly covered under the definition of 'applicant' as provided under Section 28E(c)(i) of the Customs Act for making this application. Question raised in the application for advance ruling by the Applicant squarely falls within the ambit of Section 28H(2)(a) of the Customs Act 11. Section 28H of the Customs Act provides for the questions in respect of which an advance ruling may be sought by an applicant. Section 28H of the Customs Act reads as under : "28H. Application for advance ruling. - (1) An applicant desirous of obtaining an advance ruling under this Chapter may make an application in such form and in such manner and accompanied by such fee as may be prescribed, stating the question on which the advance ruling is sought. (2) The question on which the advance ruling is sought shall be in respect of. - (a) classification of goods under the Customs Tariff Act, 1975 (51 of 1975); (b) applicability of a notification issued under sub-section (1) of section 25, having a bearing on the rate of duty; (....
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....d] 15. The Applicant submits that questions raised in the Application (as in Annexure II) are not already pending before any officer of Customs, the Appellate Tribunal, or any court in relation to the Applicant. Further, the questions raised in the present case, have not already been decided by the Appellate Tribunal or any court in the Applicant's case. 16. Accordingly, the present application should not be considered as pending before any Court as neither the show cause notice has been issued nor the bill of entries has been provisionally assessed. 17. Thus, relying on the above the facts of the current case. Applicant submits that in its case, the application shall be accepted for hearing on merits by the Hon'ble CAAR. 18. The Applicant wishes to obtain the advance ruling on the questions listed down in form CAAR -I (as also appearing in Annexure II). Hence, the Applicant has proceeded to file this application before the Hon'ble CAAR, New Delhi for kind consideration. STATEMENT CONTAINING APPLICANT'S INTERPRETATION OF LAW AND/OR FACTS, AS THE CASE MAY BE, IN RESPECT OF THE QUESTION(S) ON WHICH ADVANCE RULING IS REQUIRED ON THE BASIS OF THE FACTS SUBMITTED IN ANNEX....
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....Schedule and the Second Schedule. First Schedule of the Tariff Act deals with the applicable duty structure on import of goods and the Second Schedule deals with the applicable duty structure on export of goods. 6. Section 2(23) of the Customs Act defines imports in the following manner : "(23) "import", with its grammatical variations and cognate expressions, means bringing into India from a place outside India;" 7. Section 25 of the Customs Act contains provisions regarding power to grant exemption from duty. Section 25(1) of the Customs Act reads as under : "(1) If the Central Government is satisfied that it is necessary in the public interest so to do. it may, by notification in the Official Gazette, exempt generally either absolutely or subject to such conditions (to be fulfilled before or after clearance) as may be specified in the notification goods of any specified description from the whole or any part of duty of customs leviable thereon." 8. In exercise of the powers conferred by sub-section (1) of Section 25 of the Customs Act, Central Government vide Notification No. 57/2017-Customs, dated 30th June, 2017 ('exemption notification') provided ex....
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....nt from S. No. 5D(b) of the exemption notification furnished above that exemption from duty of Customs have been provided on import of inputs or parts for use in manufacture of such display assemblies which are in turn used in manufacturing of cellular mobile phones. 15. The Applicant hereby submits that it currently only manufactures display assemblies which are in turn used in manufacturing of cellular mobile phones. A reference in this regard can be drawn to the object clause of the Memorandum of Association (Appendix I) of the Applicant which specifies the main objects of the Applicant and the activities that it is authorized to carry out. 16. Considering the Applicant is only engaged in manufacturing of display assemblies which are in turn used in manufacturing of cellular mobile phones, the Applicant submits that it will imports inputs and parts only for the purpose of use in the manufacturing display assemblies. The Applicant will not import any inputs or parts for any purpose other than manufacturing of display assemblies. Illustrative list of inputs and parts which will be imported for manufacturing of display assembly are as under : S. No. Description of goods....
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.... inputs or parts which were imported for use in manufacture of display assembly but get damaged in the manufacturing process and thereby do not form part of a finished display assembly. 22. To answer the above question, it is imperative to analyse the scope of benefit provided under Entry No. 5D(b) of the exemption notification. 23. The benefit is provided on import of inputs and parts for use in manufacture of display assembly. Now what needs to be analysed is whether inputs and parts which are imported for the purpose and with the intention to use in manufacture of display assemblies but get damaged during the manufacturing process and do not form part of the finished display assembly can be said to be imported for use in manufacture of display assembly. 24. At this juncture, the Applicant would like to highlight that benefit under the exemption notification is available in respect of inputs and parts ' for use' in the manufacture of display assembly and not in respect of inputs and parts ' used' in the manufacture of display assembly. 25. The usage of words for use in 'manufacture' indicates that benefit is available in respect of all inputs and parts which have been....
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.... It has to be understood in the context of what a manufacturing process is. If there is no dispute about the fact that every manufacturing process would automatically result in some kind of a loss such as evaporation, creation of by­products, etc., the total quantity of inputs that went into the making of the finished product represents the inputs of such products in entirety." Copy of the judgment is enclosed herewith as Appendix-4. 30. In view of the above, it is the submitted that the inputs and parts which are damaged during the manufacturing process should be considered as used for manufacturing of display assemblies and accordingly, benefit under Notification No. 57/2017-Customs, dated 30th June, 2017 should be available. 31. The Applicant would further like to submit that exemption available to inputs and parts for use in manufacturing of a goods should also be available in respect of inputs and parts which get scrapped during the manufacturing process, as these are used in the manufacturing of the goods. 32. The above view has also been upheld by various courts in numerous cases, few of which has been referred by the Applicant in the ensuing paragraphs....
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....case of Multimetals Ltd. v. Assistant Collector, Central Excise - 1992 (57) E.L.T. 209 (S.C.) dealt with the question whether the duty referable to that portion which is lost also should get rebate while assessing for excise duty on the pipes and tubes of copper and copper alloys held as under : "Rebate is to be equivalent to the duty already paid on copper and copper alloys in its crude form, that is to say on the input. The idea seems to be that to the extent of the duty paid on the raw material used exemption has to be given and that has no reference to what ultimately found part of the finished product. It is the duty paid on the input material that is relevant and not the duty referable to the ultimate component of the final product. So far as the manufacturer is concerned he has used copper and copper alloys of a particular quantity in the manufacture of pipes and tubes. The 'manufacturing loss' forms part of the raw material "used" in the manufacture though not reflected in the final product. The relief, as we understand the Notification, that has to be given to the manufacturer was in respect of the duty already paid on the raw material used in the manufacture of t....
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....ex (Import) Customs New Delhi Commissionerate with regard to points raised in the application are furnished as under: 2.1 In this context, the point wise comments to para 3 (i) to (iii) of the aforementioned letter issued by the CAAR, New Delhi is as under : (i) Para 3 (i) Eligibility of the applicant, in terms of Section 28E(c) of the Customs Act, 1962 to seek such advance ruling : Yes, Samsung Display Noida Pvt. Ltd. is a valid applicant within the meaning of Section 28E(c)(i) of the Customs Act, 1962, having IEC Code ABCCS3215K. (ii) Para 3 (ii) Applicability of proviso (1) of Section 28-I (2) of the Customs Act, 1962 regarding the question raised in the application : As per records available in the Section, no application for the advance ruling of the applicant is pending with any officer of the Customs, other Appellate Tribunal or any Court as per proviso of Section 28(1)(2) of Customs Act, 1962. (iii) Para 3 (iii) Specify whether the claim of the applicant regarding the nature of activity, i.e. it is ongoing/proposed is correct : As per Section 28E(b) "advance ruling" means a written decisi....
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.... the said notification benefit and further that the notification itself provides for the benefit on the said goods as mentioned above to the importers in terms of IGCR rules. 2.5 Further, the importer, has also seek the clarification on the matter that the said notification benefit is whether available on the input or parts that get scrapped during the manufacturing process, and if not whether the availed customs duty exemption is to be fully reversed or reversed in proportion to the value. In this regard, the said matter is examined with the provisions of Notification No. 57/2017, Sl. No. 5D(b) which reads as follows : 5D Any Chapter (a) Display Assembly for use in manufacture of cellular mobile phones BCD @ 10% IGCR Condition No. 1 (b) inputs or parts for use in manufacture of items mentioned at (a) above BCD @ NIL IGCR Condition No. 1 2.6 As such from the reading of the provisions of the notification as amended, it is evident that there is no motif in the claim of the importer pertaining to the clarification as sought under Sl. No. 8. para- (b) as mentioned under Form CAAR-1 as submitted by the importer. Further, entry at Sl. No. 5D(b) of the Notifi....
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....'). (b) As per records available with the Ld. Assistant Commissioner, no application for the advance ruling of the Applicant is pending with any officer of the Customs, other Appellate Tribunal or any Court as per proviso of Section 28(1)(2) of the Customs Act. (c) Since the Applicant is already involved in the activity of importing inputs and parts used in the manufacture of cellular mobile phone in commercial quantity and is availing the benefit of Sr. No. 5D(b) of Notification No. 57/2017, the Applicant is not eligible to file an Advance Ruling Application in terms of Section 28E(b) of the Customs Act. (d) The entry at Sr. No. 5D (b) of Notification No. 57/2017 itself provides for the exemption from Basic Customs Duty ('BCD') for import of inputs and parts used in the manufacture of display assembly. (e) The entry at Sr. No. 5D(b) of Notification No. 57/2017 is silent on the aspect of extension of the exemption of duty on the import of the input or parts that get scrapped during the manufacturing process, and if, the availed exemption has to be fully reversed or reversed in proportion to the value of the scrapped ....
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....r export;" ], an advance ruling could be sought only in relation to proposed activity of import and export. Advance Rulings Applications for an existing activity of the importer or exporter were precluded from the purview of Customs Advance Rulings. Vide the ruling dated 13-5-2011 in the case of Oracle India Pvt. Ltd. - 2012 (277) E.L.T. 128 (A.A.R.), Customs Authority for Advance Ruling ('CAAR'), Delhi took the restrictive approach and limited the scope of advance ruling and stated that advance ruling is confined to an activity which is proposed to be undertaken and when an existing activity is sought to be expanded, the applicant was not held eligible to seek an advance ruling on the new line of business it proposed to start during its existing import trade. However, it was clarified that an existing entity, which is not in the import-export business but proposes to start the business of import and export, would not be precluded from approaching CAAR for an advance ruling. (J) Thereafter during the period 2013 to 2018, there was a gradual shift and Advance Rulings could also be sought in relation to new business of import or export [Section 28E (a) of Customs Act (....
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.... term "its" used in the definition of advance ruling under Section 28E(b) of Customs Act. This is because the term "its" does not clarify whether advance ruling can only be sought prior to first importation of a particular goods which has never been imported or it can also be sought before importation of a goods which is being imported by the Applicant. (P) To interpret the term "its" used in Section 28E(b), reference is to be placed on Section 28-I(2) of Customs Act which bars the CAAR authorities from entertaining any application for an advance ruling where the question raised in the application is already pending before any officer of Customs, the Appellate Tribunal, or any Court. From the provision, it can be deduced that any importer shall be eligible to make an advance ruling application for the same goods which have been imported before or in respect of which investigation is initiated except for any case where any 'lis' is pending before any officer of customs or appellate authority in relation to the same subject matter. (Q) Further, it is trite law that principle of harmonious construction must be kept in mind while co....
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....stated the following : "8. ........ Insofar as the issue of advance rulings in respect of an ongoing activity is concerned, with due regard to the definition of advance ruling in law, it is my considered opinion that operation of advance rulings do not get extinguished just because an activity of import/export has taken place earlier, irrespective of the frequency of such activity. Drawing strength from the provisions of law reproduced earlier in this paragraph, a correct interpretation would be that advance rulings can be sought and given even for ongoing activities, so long as such activities, in respect of the same applicant, are not involved in any dispute; or already settled by an order of any competent tribunal/court. However, the application of such an advance ruling, in respect of an ongoing activity, shall be prospective and would not have any implication for activities, which stand concluded." [Emphasis supplied] (V) Similarly, in the case of Sick India Private Limited (Ruling no. CAAR/Mum/ARC/47/2022, dated 27.12.2022 the CAAR authorities have held that the past SVB and DRI related investigation had no bearing for valuat....
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....dure set out in the Customs (Import of Goods at Concessional Rate of Duty) Rules, 2017". The said Rules have now been replaced by the Customs (Import of Goods al Concessional rate of Duty or for Specified End Use) Rules, 2022 ("IGCR Rules, 2022"). IGCR Rules, 2022 has clarified (in Rule 13) that any reference made to IGCR Rules, 2017 shall be construed as reference to IGCR Rules, 2022. (BB) Sl. No. 5D(b) of the Notification provides for "NIL" rate of BCD for import of inputs and parts for use in the manufacture of Display Assembly for use in the manufacture of cellular mobile phones. For ease of reference, the aforesaid entry has been extracted as follows : Sl. No. Chapter or Heading or Sub-heading or tariff item Description of goods Standard rate Condition No. (1) (2) (3) (4) (5) 5D Any Chapter (a) Display Assembly for use in manufacture of cellular mobile phones 10% 1 (b) Inputs or parts for use in manufacture of items mentioned at (a) above Nil 1 (c) Inputs or sub-parts for use in manufacture of parts mentioned at (b) above Nil 1 &nb....
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.... xx 13. We are, therefore, of the view that the real question which we are called upon to determine is whether, in the present case, the cement supplied was intended for use directly in the generation or distribution of electrical energy. If it was so intended, the exemption was attracted but not otherwise. The certificates which we have referred to earlier issued by the Board clearly show that the intention of the Board was that the cement should be used for a purpose directly connected with the generation or distribution of electrical energy. There is no material to show that the certificates were false certificates given by the Board, having another use in mind, or that they were fraudulently obtained by the assessee in collusion with the Board. The mere fact that some of the cement supplied was, in fact, used by the Board for activities not directly connected with the generation or distribution of electrical energy cannot make any difference regarding the availability of the exemption. [Emphasis supplied] (FF) Hence, in view of the above, the Applicant is of the opinion that the exemption from BCD under Sl. No. 5D(b) of Notifica....
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....goods which are placed in the assembly line for the purpose of manufacture of display assembly irrespective of whether the same get incorporated in the manufactured Display Assembly or are damaged or scrapped during manufacturing. (KK) Therefore, the understanding of the Ld. Assistant Commissioner that the entry at Sl. No. 5D(b) of Notification No. 57/2017 is silent on the aspect of extension of the benefit of concessional rate of duty on the import of the input or parts that get scrapped during the manufacturing process, is not correct. Upon strict interpretation of the exemption provision and application of the ratio of the judgments, the Applicant is of the view that the Notification No. 57/2017 is clear and provides that the benefit of exemption is available for all inputs and parts used to manufacture mobile phone, irrespective of the fact that the same forms part of the finished goods or are scrapped during the manufacturing process. (LL) Further, the Applicant is of the view that your good office is a competent authority to conclusively determine the interpretation of the exemption provision as provided under Sl. No....
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....f benefit on BCD in terms of notification No. 57/2017, Sl. No. 5D(b) in which they are already importing the same product i.e. inputs and parts for use in manufacturing of display assemblies. It appears that the applicant does not fulfil the provisions of Section 28E(b) of the Customs Act, 1962 to seek advance ruling in respect of the goods which are already being imported by them in commercial quantity before any written decision of the authority. In view of the above, it appears that the application filed by M/s. Samsung Display Noida Pvt. Ltd. (hereinafter referred to as the 'importer') merits rejection in terms of Section 28E(b) of the Customs Act, 1962. 5.4 The point wise comments to para 3(iv) of the aforementioned letter issued by the CAAR, New Delhi is as under : (i) The matter is examined and it is found that the basic issue as involved in the said application for advance ruling under Section 28H of the Customs Act, 1962 as filed by M/s. Samsung Display Noida Pvt. Ltd. pertains to the Question of Law/fact that whether the benefit of BCD @ NIL in terms of notification No. 57/2017, Sl. No. 5D(b) on the "Imports of inputs and parts for use in manufacturing o....
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....uts and parts. Applicant also procures packing material for finished goods locally. The said activity is duly slated in the object clause of Memorandum of Association of the Applicant as : "To carry on the business of manufacturing, assembling, processing, marketing or sales of displays ........." 6.2 In relation to the imported inputs and parts, the Applicant is currently availing the benefit under Notification No. 57/2017-Customs, dated, 30th June, 2017 (hereinafter referred to as 'exemption notification'), which provides for 'nil' rate of duty on import of inputs and parts for use in manufacturing of Display Assembly for use in manufacture of cellular mobile phones. 6.3 The benefit under exemption notification being presently availed by the Applicant has not been disputed by authorities at any point in time till date. The Applicant for the purpose of manufacturing of display assemblies imports various inputs and parts. These inputs and parts are put on the assembly line where these are put through various assembly and testing processes. The final product produced from the assembly line is the display assembly for use in manufacturing of cellular mobile phones. 6.3.1 The....
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....stion on which the advance ruling is sought shall be in respect of, - (a) classification of goods under the Customs Tariff Act, 1975 (51 of 1975); (b) applicability of a notification issued under sub-section (1) of section 25, having a bearing on the rate of duty; (c) the principles to he adopted for the purposes of determination of value of the goods under the provisions of this Act. (d) applicability of notifications issued in respect of tax or duties under this Act or the Customs Tariff Act, 1975 (51 of 1975) or any tax or duty chargeable under any other law for the time being in force in the same manner as duty of customs leviable under this Act or the Customs Tariff Act; (e) determination of origin of the goods in terms of the rules notified under the Customs Tariff Act, 1975 (51 of 1975) and matters relating thereto. (f) any other matter as the Central Government may, by notification, specify." [Emphasis supplied] 6.5 The questions in respect of which an advance ruling has been sought by the Applicant are : Whether benefit of Sl. No. 5D(b) of Notification No. 57/2017-Custo....
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.... manufactures display assemblies which are in turn used in manufacturing of cellular mobile phones. Considering the Applicant is only engaged in manufacturing of display assemblies which are in turn used in manufacturing of cellular mobile phones, the Applicant submits that it will imports inputs and parts only for the purpose of use in the manufacturing display assemblies. The Applicant will not import any inputs or parts for any purpose other than manufacturing of display assemblies. Illustrative list of inputs and parts which will be imported for manufacturing of display assembly are as under : Sl. No. Description of goods Inputs and parts Chapter or Heading or Sub-heading or tariff item 1. AMOLED Panel 2. Window Glass 3. Polarizer 4. Main - Flexible PCB Any chapter - Vide Notification No. 57/2017-Customs, dated 30th June 2017 5. Touch (TSP)- Flexible PCB 6. Optically Clear Adhesive Tape 7. Anisotropic Conductive Film 8. Resins 6.5.3 In view of above, in relation to the inputs and parts proposed to be imported by the Applicant for the purpose of use in ma....
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.... the manufacturing process and do not form part of the finished display assembly can be said to be imported for use in manufacture of display assembly. At this juncture, the Applicant would like to highlight that benefit under the exemption notification is available in respect of inputs and parts 'for use' in the manufacture of display assembly and not in respect of inputs and parts 'used' in the manufacture of display assembly. The usage of words 'for use in manufacture' indicates that benefit is available in respect of all inputs and parts which have been used for manufacturing the display assembly and not only in respect of inputs and parts which form part of the finished display assembly. 6.6.2 Every manufacturing process has some inherent loss which is unavoidable considering the nature of the manufacturing process. The inputs which get consumed during the manufacturing process whether by way of forming part of the final output or by way of the inherent process loss are used in the manufacturing process. The phrase for 'use in manufacture' has not been defined under the Customs Act, however, what amounts to 'inputs being used in the manufacture of goods' has been analysed b....
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....e, 2017 should be available. Further, the applicant has submitted that exemption available to inputs and parts for use in manufacturing of a goods should also be available in respect of inputs and parts which get scrapped during the manufacturing process, as these are used in the manufacturing of the goods. The above view has also been upheld by various courts in numerous cases, few of which has been referred by the Applicant in the ensuing paragraphs : (i) The Hon'ble Supreme Court in the case of BPL Display Devices Ltd. v. Commissioner of Central Excise, Ghaziabad - 2004 (10) TMI 92 - SUPREME COURT held that benefit of the Notifications could not be denied in respect of goods which were intended for use for manufacture of the final product but could not be so used due shortage or leakage. The Apex Court further held that "We are of the view that no material distinction can be drawn between the loss on account of leakage and loss on account of damage. The words 'for use' used in similar exemption Notifications have also been construed by this Court earlier in the State of Haryana v. Dalmia Dadri Cement Ltd., [1987 (11) TMI 94 - SUPREME COURT ....
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.... has used copper and copper alloys of a particular quantity in the manufacture of pipes and tubes. The 'manufacturing loss' forms part of the raw material "used" in the manufacture though not reflected in the final product. The relief, as we understand the Notification, that has to be given to the manufacturer was in respect of the duty already paid on the raw material used in the manufacture of the final product. That is the relief has to be given to the extent of the duly paid on the input material and not with reference to the quantity which ultimately forms part of the final product." Therefore, the submission of the Applicant that benefit under Entry No. 5D(b) of Notification No. 57/2017-Customs, dated 30th June, 2017 should be available in respect of inputs and parts which are damaged during the manufacturing process and are subsequently scrapped by the Applicant appears to be valid. 6.7 The Applicant has made additional submission in response to the letter dated 21-5-2024 of the Port Commissionerate that since the Applicant is already involved in the activity of importing inputs and parts used in the manufacture of cellular mobile phone in commercial quantity and is av....
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....arate event. Accordingly, upon application of principle of harmonious construction and the fact that each import is a separate event, the Applicant is of the considered opinion that an advance ruling can also be sought prior to importation of a goods which is being imported by the Applicant (but before the importation in question takes place). Reliance in this regard is being placed on the Advance Ruling issued by CAAR Mumbai in the case of Amazon Seller Services Pvt. Ltd., (2023) 5 Centax 186 (A.A.R. - Cus. - Mum.), whereby the CAAR authority in para 8 has stated the following : "8. .......... In sofaras the issue of advance rulings in respect of an ongoing activity is concerned, with due regard to the definition of advance ruling in law, it is my considered opinion that operation of advance rulings do not get extinguished just because an activity of import/export has taken place earlier, irrespective of the frequency of such activity. Drawing strength from the provisions of law reproduced earlier in this paragraph, a correct interpretation would be that advance rulings can be sought and given even for ongoing activities, so long as such activities, in respect of the same....
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.... Description of goods Standard rate Condition No. (1) (2) (3) (4) (5) 5D Any Chapter (a) Display Assembly for use in manufacture of cellular mobile phones 10% 1 (b) Inputs or parts for use in manufacture of items mentioned at (a) above Nil 1 (c) Inputs or sub-parts for use in manufacture of parts mentioned at (b) above Nil 1 Condition No. Conditions 1. If the importer follows the procedure set out in the Customs (Import of Goods at Concessional Rate of Duty) Rules, 2017. 6.8.2 Upon perusal of the entry extracted above, it is clear that the exemption benefit is available to "Inputs or parts for use in manufacture of Display Assembly of cellular mobile phones". The term, "for use" mentioned in Sl. No. 5D(b) has not been defined in the Customs Act and Notification No. 57/2017. However, the Hon'ble Supreme Court and various High Courts in a catena of cases have interpreted the term "for use" to mean "intended for use" or "inputs being used in the manufacture of goods". In such a case, the courts have consistently held that damaged goods or scrapped goods are....
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....ilability of the exemption. [Emphasis supplied] 6.8.4 Hence, in view of the above, the Applicant is of the opinion that the exemption from BCD under Sr. No. 5D(b) of Notification No. 57/2017 is available to all inputs and parts used in the manufacture of Display Assembly irrespective of whether the same get incorporated in the manufactured Display Assembly or are damaged or scrapped during manufacturing. Further, it is trite law' that an exemption notification ought to be construed strictly in order to determine the applicability of the exemption provision. However, once the exemption becomes applicable then the provisions must be construed liberally Union of India v. Wood Papers Ltd., 1990 (47) E.L.T. 500 (S.C.). In the present case, the Ld. Assistant Commissioner has itself agreed that the benefit of exemption under Sr. No. 5D(b) of the Notification No. 57/2017 is available for input and parts imported by the Applicant which are thereafter used in the manufacturing of Display Assembly of mobile phones. Hence, based on liberal construction of the exemption provision it can be said that all the imported inputs and parts which are used in the manufacture of Display Assembly, e....
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....Rate of Duty for Manufacture of Excisable Goods) Rules, 1966, the [Asstt. Commr. of Central Excise or Deputy Commr. of Central Excise] shall ensure that the goods imported are used by the manufacturer for the intended purpose or are re-exported..." 6.10 The case law further strengthens the stand of the applicant that the concessional benefit where the goods have been consumed during the manufacture process and not necessarily the goods which form part of the manufactured goods. Thus, the above discussion clearly corroborates the understanding that the extant exemption is applicable to all the goods which are placed in the assembly line for the purpose of manufacture of display assembly irrespective of whether the same get incorporated in the manufactured Display Assembly or are damaged or scrapped during manufacturing. Therefore, the understanding of the Port Commissionerate that the entry' at Sr. No. 5D(b) of Notification No. 57/2017 is silent on the aspect of extension of the benefit of concessional rate of duty on the import of the input or parts that get scrapped during the manufacturing process, appears not to be appropriate. Upon strict interpretation of the exemption prov....