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2006 (7) TMI 371 - AT - CustomsDemand duty - EXIM policy - Advance licence - DEEC Scheme - goods imported duty free - transfer to another unit - violation of post import condition - condition No. (vii) of Notification 30/97 - HELD THAT:- We agree with the appellants’ submission that as per definition of actual user in the policy use by their other unit cannot be considered as transfer to any other person as long as the goods have not been sold as such but have been used for the manufacture of final product and the final product is sold by Taloja unit and therefore there cannot be any contravention of condition no. (vii). The material in these cases were essentially for replenishment and only imbargo imposed on replenished material is that they should not be sold or transferred to any other person. Since we have already held that once the material is used in the appellant’s own unit it cannot be considered to be transfer and since the other unit has not sold the material as such but used it in manufacture of the final product the requirement of condition no. (vii) have been fulfilled. As regards the use of duty free imported raw material first in the manufacture of final products required to be exported for meeting export obligation before being used for use for domestic clearances of the same product we find that the Tribunal in the cases of Dolphin Drugs [1999 (8) TMI 258 - CEGAT, MADRAS], Standard Industries [1999 (8) TMI 956 - CESTAT MUMBAI] and Jay Engineering Works [2003 (7) TMI 236 - CESTAT, BANGALORE] have consistently taken a view that as long as the export obligation has been met it is immaterial whether the goods were first used for domestic clearances and exports were made later on or vice versa. Even though in the above decisions there was difficulty in selling the product in international market the duty exemption were nevertheless held admissible and only the export obligation period was extended due to extenuating circumstances. We, therefore, hold that there has been no violation of condition No. (vii) of Notification No. 30/97 in these cases also. This is relevant only in respect of Appeal as in the other two cases the imports were made after export obligation were already fulfilled. Thus, we set aside the order of the Commissioner’s and allow the appeal with consequential relief. Stay petitions also get disposed of.
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