2026-VIL-1730-CESTAT-DEL-CU
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CUSTOMS CESTAT Cases

Customs - Exemption under Sr. No. 528 and 528A of Notification No. 50/2017-Cus - Condition No. 9 - Customs (Import of Goods at Concessional Rate of Duty) Rules, 2017 - Manufacture through job worker - Appellant, engaged in manufacture of electric buses, imported components at concessional/nil rate of duty, filed intimations, furnished continuity bond with security and filed returns under the Rules - Appellant entered into an MOU with its sister concern for fabrication of the buses from the imported components at the premises shared by both, and the imported goods were shown as sold to the sister concern under tax invoices - Department alleged that the imported goods were sold and cleared as such without permission, in violation of Rule 7(2) - Whether the Appellant violated the provisions of the IGCR Rules, 2017 so as to lose the benefit of the exemption - HELD - The IGCR Rules operationalise verification of the end-use condition through intimation, bond, records and returns. Rule 7 places a primary obligation on the importer to use the goods within six months and provides an option of re-export or home clearance for unutilised or defective goods - It is admitted that the Appellant followed the procedure of intimation, bond and returns, that the imported components were used in the manufacture of electric buses supplied to the transport corporation, and that both entities shared the same manufacturing premises. The only lapse is that the Appellant entered into a business arrangement with the sister concern for fabrication and the imported goods were shown as sold to the job worker. There is no allegation that the imported goods were not used for the purpose for which they were imported - The Tribunal has repeatedly treated obligations under such Rules as procedural or facilitative where the importer's substantive entitlement is not in doubt, and held that the end-use condition is satisfied where goods are used on behalf of the importer in a job worker's factory. The subsequent amendment of the Rules expressly provides for sending goods to a job worker, recognising the business practice. Procedural lapses can be condoned if substantial compliance is met. Even though the buses were manufactured on job work, the imported components did not leave the Appellant's factory premises - There is substantial compliance with the Notification and duty cannot be demanded - The impugned order is set aside and the appeal is allowed
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