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viii. "Materials" means goods which are raw materials, components, intermediate products or consumables used in the manufacture of resultant products and their packings, or mandatory spares to be exported alongwith the resultant products:"

10. CEGAT has laid great emphasis on the words "substantial manufacturing activity" appearing in para 221 set out above. In the opinion of the CEGAT, the term "substantial manufacturing activity" must necessarily mean that not just the resultant product (which has to be exported) but a substantial amount of components or materials which go into making of the resultant product must also be manufactured by the party. It was submitted that the appellants should have manufactured components to the extent as in their application that the components i.e. to the tune of Rs. 2,32,69,200/-. It is submitted that the appellants have used components of only of the value of approximately Rs. 8 lakhs. It was further submitted that the appellants had merely assembled the scanners out of components, imported by them alongwith some Indian components. It is submitted that, therefore, it cannot be said that any manufacturing activity has taken place. In these words of the tribunal "the only manufacture that could have taken place, therefore, would be assembly of components into the finished machines." It is submitted that the"M/s. Nicolian Brothers would not have been granted a licence if they had not misrepresented to the licensing authority that they would be using indigenous components of the value of Rs. 2,32,69,200/-. It is submitted that as there was a misrepresentation the appellants were not entitled to the benefits of this exemption notification.