Fresh Laboratories vs Commissioner Of Customs (Exports) ... on 14 January, 2011
14. The case of the importer, as stated by their counsel, is that the notifications did not purport to insist that the raw material imported under an advance licence should be of the same specifications and material characteristics as those of the inputs actually used in the exported product. It is their contention that, if the raw material imported and the one used in the exported product are both covered by the advance licence, that would suffice the purpose. It was in this context that the learned counsel relied on the Tribunals decision in Metro Tyres case. We have already discussed the case of Metro Tyres, to some extent, in an earlier part of this order. In the present context, it would be enough to say that, in that case, what was imported for duty-free clearance under Notification No. 159/90-Cus was synthetic rubber and what was used in the manufacture of the exported product (resultant product) was also synthetic rubber. The only difference was that the imported synthetic rubber was of the type of Butyl rubber, whereas the input used in the resultant product was synthetic rubber of a different variety. The Tribunal, in that case, held in favour of the importer after observing thus Once the appellants contention that they had used synthetic rubber although not of the Butyl rubber variety in the manufacture of exported articles has not been contradicted or found to be wrong, the importation of synthetic rubber of Butyl variety could amount to a material which could be imported for purpose of replenishment in terms of the language of the Notification. It would thus appear that, in the case of Metro Tyres, the department had not found fault with the importer having used one variety of synthetic rubber in the resultant product and importing another variety of synthetic rubber for duty-free clearance under the notification. The facts of the present case are different. In the present case, it has been the consistent case of the Revenue that the benefit of Notification No. 159/90-Cus is not admissible to the importer who used Sorbitol in the manufacture of toothpaste and imported Glycerine as replenishment claiming duty-free clearance under the Notification and further that they used gum in the manufacture of the resultant product and imported Irish Moss/Viscarine as replenishment. It is not in dispute that Glycerine is different from Sorbitol in material characteristics including chemical composition, physical properties, uses etc. It is again not in dispute Irish Moss or Viscarine is not the same as gum. The only case of the importer is that all these items are covered by the advance licences and, therefore, one material should be allowed as replenishment for the other.