TMI Blog2002 (11) TMI 108X X X X Extracts X X X X X X X X Extracts X X X X ..... unt of the components must also be manufactured. If that were required the policy would have said so. Of course, as set out in the case of M/s. Rattan Exports Ltd., Delhi v. Collector of Customs, Calcutta reported in [1987 (8) TMI 84 - SUPREME COURT OF INDIA] mere fixing of a part or two on a fully assembled product would not be considered to be manufacture. But that is not the case here. Therefore, the finding that manufacturing activity had not been undertaken cannot be sustained. Thus, it is clear that ultrasound scanners have been manufactured. As regards the contention that the appellants were not entitled to the benefit of the exemption notification it is to be noted that the licensing authority having taken no steps to cancel the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , 1989. They then exported, out of India, forty-five Ultrasound Scanners (ten of which were of specification No. 1 and thirty-five of the specification No. 2). The Customs authorities (respondents) permitted them to export the said scanners, allowed the benefit of exemption notification and cancelled the bond which had been executed by M/s. Nicolian Brothers. 4.On 6th November, 1990, a common show cause notice came to be issued to the appellants in both the matters. By this notice, the appellants were called upon to show cause as to why duty and penalty be not levied on them for not having complied with the conditions of the exemption notification. The appellants filed their reply to the show cause notice. The Collector of Customs, by his ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... "219. (1) The objective of the scheme is to make available to the Registered Exporters the necessary inputs for export production at international prices without payment of Customs duty so as to make the exports competitive in the international market. The scheme covers three categories of licences - (1) Advance Licences, (2) Intermediate Advance Licences and (3) Special Imprest Licences. The basis and conditions on which these three categories of licences are issued under this scheme vary and licences issued under one category, therefore, cannot be mixed up with the other. Imports made against a licence granted under this scheme will be eligible for Customs duty exemption as per the relevant Customs Notifications issued in this regard. Ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... issued under the Imports (Control) Order, 1955, being materials required to be imported for the purpose of manufacture of products (hereinafter referred to as the resultant products) or replenishment of materials used in the manufacture of the resultant products, or both, or for export as mandatory spares along with the resultant products, for execution of one or more export orders, from the whole of the duty of customs leviable thereon which is specified in the First Schedule to the Customs Tariff Act, 1975 (51 of 1975) and from the whole of the additional duty leviable thereon under section 3 of the said Customs Tariff Act, subject to the following conditions, namely : - ……. the goods corresponding toc. the resultant products and the ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hem along with some Indian components. It is submitted that, therefore, it cannot be said that any manufacturing activity has taken place. In these words of the Tribunal "the only manufacture that could have taken place, therefore, would be assembly of components into the finished machines." It is submitted that the M/s. Nicolian Brothers would not have been granted a licence if they had not misrepresented to the licensing authority that they would be using indigenous components of the value of Rs. 2,32,69,200/-. It is submitted that as there was a misrepresentation the appellants were not entitled to the benefits of this exemption notification. 11.It is not disputed that what was imported were components, as set out in the Bill of Entry. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssarily implies that not only the final product but a substantial amount of its components must also be manufactured by the party. We are unable to read any such requirement into the words "substantial manufacture". The words "substantial manufacture" appear to indicate that there need not necessarily be manufacture, but that any activity, including activities like assembling, which result in a new product, which is commercially a different product from what is imported, would be sufficient. The words "substantial manufacturing" do not indicate in any manner that a substantial amount of the components must also be manufactured. If that were required the policy would have said so. Of course, as set out in the case of M/s. Rattan Exports Ltd. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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