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2020 (2) TMI 1602 - AT - CustomsImport of the Graphite Tubes - imported Graphite Tubes were not used by the appellant in their factory - non-compliance with the condition of Notification No. 21/2002-Cus., dated 1-3-2002 - HELD THAT:- It is an undisputed fact that the imported Graphite Tubes during the relevant period were received in the factory premises of the appellant, and the same cleared to the site of the customer, and fitted to Heat Exchangers, which in turn, used in MSFE system installed at the site of the customer. The Revenue’s objection is that as a condition of the said Notification No. 21/2002-Cus., dated 1-3-2002 read with Customs (Import of Goods at Concessional Rate of Duty for Manufacturing of Excisable Goods) Rules, 1996, the imported Graphite Tubes were required to be used “in his factory”, even though the same were fitted to Heat Exchanger at the site of the customer. Rebutting the said argument, the appellants have submitted that after receiving the Graphite Tubes in their factory the same were tested for its suitability in the Heat Exchanger and cut to relevant sizes, thereafter cleared to the site of the customer for fitting it finally in the Heat Exchanger. They have argued that the Graphite Tubes are cleared separately instead of fitting the same in their factory due to the fragile nature of the said Graphite Tubes, which in all probability could break during the course of transportation of the Heat Exchanger to the site. The Revenue’s only objection in denying the benefit of Notification is that the imported Graphite Tubes were not used by the appellant in their factory. There is no dispute of the fact that the Graphite Tubes were received in the factory and to the claim of the appellant that they were tested and made suitable after necessary cutting and polishing, etc., to be used in Heat Exchanger, a part of MSFE system, no contrary evidence has been placed on record - a logical, reasonable and technically sound explanation has been furnished by the appellant for such separate clearance. It is stated that due to fragile nature of the imported graphite tubes, after its testing the same were cleared separately to avoid damage during transportation of the Heat Exchangers to the site. It cannot be denied that the Heat Exchanger cannot function without having fitted with the Graphite Tubes and the Revenue has not disputed that the said Graphite Tubes were fitted to Heat Exchanger at the site of the customer. The appellant had complied with the condition of Notification of using the imported goods in their factory both in letter and spirit, hence denial of benefit exemption Notification No. 21/2002-Cus., dated 1-3-2002 to them would be unjustified and accordingly, the impugned order is liable to be set aside on merit. Also, there is a good case on limitation also. Appeal allowed - decided in favor of appellant.
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