TMI Blog2006 (7) TMI 371X X X X Extracts X X X X X X X X Extracts X X X X ..... d 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 i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the condition imposed under this notification i.e. Condition No. (vii) was as under :- exempt materials shall not be disposed of or utilized in any manner except for utilization in discharge of export obligation or for replenishment of such materials and the materials so replenished shall not be sold or transferred to any other person. 5. Since in these cases the imported materials were found to be entered in the RG 23A Part I Register of the Tarapur unit except 2-3 consignments which were received at Taloja unit and were used at the Tarapur unit it was alleged by the department that the appellants have violated the above condition No. (vii) of Notification 30/97 as the material could not have been transferred to another unit and further since the material was not used in the products which were exported but were used in the product which were sold in the domestic market it was considered that the utilization of the material was not as per requirement of condition No. (vii) as the appellants should have first used the material for discharge of their export obligation and could not have used for clearance in domestic market. A show cause notice was accordingly issued and confi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... etation is not sustainable in view of the clear language employed in the first portion of the definition of actual user industrial . The first portion of definition of actual user contemplates use of the inputs by the licence holder in his own industrial unit. There is no stipulation that the licence-holder has to use the imported goods in the unit whose address is specified in the DEEC Book. 9. The manner of using the inputs is stipulated in para 7.3(a)(ii) of the Policy wherein it has been stated that a merchant-exporter is entitled to obtain the advance licence provided the name of the supporting-manufacture is endorsed on the licence or in the DEEC book. Such a stipulation can also be found in para 7.18 of the Hand-book of Procedures, Vol. 1. In such situations, it is mandatory on the part of the licence holder to use the imported inputs only in the factory of the supporting-manufacturer whose name is endorsed on the DEEC book. 10. In view of the above, it was submitted that use of the imported, duty free goods, in their other unit does not violate the actual user condition. Without prejudice to the above, it was submitted that the second portion of definition of actual ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in domestic market to avoid contamination and total loss due to fire in factory. Decision in Dolphin case has been followed in Standard Industries Ltd. v. Commissioner of Customs, Trichy - 2001 (136) E.L.T. 124 (Tri.-Mumbai) and Jay Engineering Works Ltd. v. Commissioner of Customs, Chennai 2003 (162) E.L.T. 680 (Tri.-Bang.). It was submitted that in the Jai Engineering Works Ltd. case it was further held that under the terms of Notification No. 204/92-Cus. which is similar to the Notification 30/97 that the Exim policy and corresponding customs notification permit duty free import of material required for the manufacture of the export product. The actual use of the imported input was not a condition under this notification. The words required for manufacture of export product have therefore to be interpreted keeping in view the fact that the inputs permitted under the standard output norms and in the import licences are inputs required for manufacture of corresponding export product. The notification places no restriction on actual use. It was accordingly submitted that it is not denied that the raw material imported were required for the manufacture of export product and the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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