Whether non execution of bond and non receipt of imported goods in factory be reason to deny the benefit of import of material at concessional rate?

PJ/Case Law/2013-14/1723

Case:-COMMISSIONER OF CENTRAL EXCISE, KOLHAPUR Vs M/s VIJAY SOLVANT EXTRACTION LTD

Citation:- 2013-TIOL-1264-CESTAT-MUM

Issue:-
Brief Facts:-Brief facts of the case are that the respondents received certain raw materials by availing the benefit of Customs Notification No. 16/2000-Cus dated 1.3.2000. The respondent made import of Soya bean Crude Oil at concessional rate of duty. The respondent sent the imported Soya bean Crude Oil directly to the factory of M/s Varana Soya Industries Ltd where the goods were processed and finished goods i.e. Refined Soya bean Oil was sold from there by preparing sales bills in the name of the respondents. A Show Cause Notice was issued to the respondent alleging that by sending the goods to another factory the respondents had contravened the Rules and was not eligible for the benefit of the Notification. The adjudicating authority confirmed the demand and imposed penalty. The Commissioner (Appeals) set aside the impugned.

Appellant’s contention:-The only contention in the appeal of the Revenue is that as per the provisions of the Customs (Import of Goods at Concessional Rate of Duty for Manufacture of Excisable Goods) Rules, 1996, the importer has to execute a bond in respect of the end use of the imported
goods in the manufacturer's factory. In the present case as the imported goods was not received in the factory of the respondents, therefore the demand was rightly made.

Reasoning of Judgment:- Revenue is not disputing the fact that imported goods were used for the
intended purpose i.e. for the manufacture of refined oil. The Commissioner (Appeals) also noted that for subsequent period the jurisdictional Deputy Commissioner has allowed the respondents to send the imported material to M/s Warana Soya Industries for processing i.e. refining. In these circumstances, we agree with the findings of the Commissioner (Appeals) that the requirement of bringing the imported goods for use in the respondent's factory is a procedural one. In view of the above, we find no infirmity in the impugned order and the appeal filed by the Revenue is dismissed.

Decision:-Revenue Appeal Dismissed.

Comment:-The crux of this case is that the benefit of import of goods at concessional rate of duty should not be denied on procedural lapses of non-execution of the bond and non receipt of imported material in the factory of the appellant when the end use of the imported goods for the specified purpose is not disputed.

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PJ/Case Law/2013-14/1723

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