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2015 (4) TMI 641 - CESTAT NEW DELHIActual user condition - various components were imported free of basic custom duty under Notification No.24/2005-Cus for use in manufacture of telecommunication equipment - re-export of defective components - re-export of surplus inventory - some components written-off - Held that:- Re-export of defective components after being issued for manufacturing would be treated as used for intended purpose - Following decision of Asahi India Safety Glass Limited vs. Union of India reported in [2004 (9) TMI 118 - HIGH COURT OF DELHI] - such components have to be treated as having been used and hence the assessee cannot be asked to reverse the cenvat credit. Following the judgments of the Tribunal, these components have to be treated as having been used for the intended purpose and hence the duty demand of ₹ 1,71,07,253/- would not be sustainable and has to be set aside. As regards the duty demand of ₹ 94,29,117/- in respect of the surplus inventory which was re-exported and the duty demand of ₹ 23,15,901/- in respect of the components written-off admittedly these components have not been used for the manufacture of the finished products and, therefore, in our view the Department is justified in invoking Rule 8 of the 1996 Rules for recovery of duty. Since the components in respect of which the duty demand of ₹ 94,29,117/- has been confirmed have been re-exported, in our view, the customs authorities have to consider the appellants claim for duty drawback. While customs duty demand of ₹ 1,71,07,253/- and also the order of penalty of ₹ 20,23,000/- is set aside, the customs duty demands of ₹ 23,15,901/- and ₹ 94,29,117/- are upheld. As regards the appellants claim for draw-back in respect of the components re-exported, the same may be considered by the concerned customs authority - Decided partly in favour of assessee.
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