1992 (3) TMI 215 - AT - Customs

Summary

Issues:
1. Interpretation of Notification 28/90 for exemption of duty on imported lactose.
2. Requirement of an end-use bond for ensuring proper utilization of the exempted goods.
3. Applicability of end-use conditions on subsequent sales beyond the first sale by the importers.

Analysis:
1. The appellants imported pharmaceutical-grade lactose and claimed exemption under Notification 28/90. The Assistant Collector rejected the exemption, stating it was only for actual users in homeopathic medicine manufacturing. The Collector (Appeals) allowed the exemption subject to executing an end-use bond for selling to homeopathic medicine manufacturers within a specified time frame. The appellants challenged the requirement of the end-use bond, arguing it was not a condition in the notification. The SDR contended the bond was necessary to prevent diversion of goods to non-manufacturers.

2. The Tribunal found the goods eligible for exemption but upheld the Collector (Appeals)'s decision on the end-use bond. The appellants raised concerns about controlling subsequent sales beyond the first one. They provided evidence of conformity to homeopathic standards and monitoring by the Assistant Drugs Controller. The Tribunal considered the bond a reasonable safeguard against misuse, directing that subsequent sales need not be accounted for in the bond, given the monitoring by the Drugs Controller in Delhi.

3. The Tribunal disposed of the appeal, upholding the requirement of an end-use bond but allowing flexibility regarding subsequent sales beyond the first one. The decision balanced the need to prevent misuse of the exemption with practical considerations faced by the importers, ensuring compliance with the notification while addressing the concerns raised by the appellants regarding the execution of the bond and subsequent sales monitoring.