2004 INSC 1160
                                    SUPREME COURT OF INDIA

                                      BFL Display Devices Limited

                                                      Vs.

                             Commissioner of Central Excise, Ghaziabad

                                            C.A.No.602 of 2004

                                  (Mrs.Ruma Pal and Arun Kumar JJ.)

                                                 08.10.2004

                                                JUDGMENT

Ruma Pal, J.

1. The question in this appeal is whether the appellant is entitled to the benefit of Notification
No. 13/97-Cus. as amended by Notification No. 25/99-Cus. These two Notifications provide
for certain benefits to specified items if they are imported into India 'for use' in the
manufacture of other items specified in the notifications.

2. It is not in dispute that the appellant had imported parts of picture tubes for manufacture of
colour picture tubes. Both the input and the manufactured items are covered by the
Notifications. It is also not in dispute that a small percentage of the imported parts were
damaged in Transit and could not be used to manufacture picture tubes during the year 2000-
2001. The appellant claimed the benefit of the aforesaid Notifications in respect of the entire
lot of the parts imported relying, inter alia, upon the earlier decision of the Tribunal in
National Organic Chemical Indus. Ltd. v. Collector of Customs (Import), Mumbai1, which
had held that the benefit of the Notifications could not be denied in respect of goods which
were intended for use for manufacture of the final product but could not be so used due
shortage or leakage. The Notifications relied upon in the decision in National Organic
Chemical Indus. Ltd. (supra) are substantially similar to the present Notification. The appeal
preferred by the Department from the decision of the Tribunal was dismissed by this Court
on 20th, February, 2002 - Commissioner of Customs v. M/s. National Organic Chemical
Indus. Ltd. [C.A. No. 6764/99]. The Tribunal, however, relied upon its earlier decision in the
case of Commissioner of Central Excise, Meerut v. M/s. BPL Display Devices Ltd. reported
in2 to hold against the appellant. This Court following the affirmation of the Tribunal's
reasoning in National Organic Chemicals Indus. Ltd. (supra) on 20-2-2002, allowed the
appellant's appeal. This appeal must therefore be necessarily allowed. We are of the view
that no material distinction can be drawn between the loss on account of leakage and loss on
account of damage. The words 'for use' used in similar exemption Notifications have also
been construed by this Court earlier in the State of Haryana v. Dalmia Dadri Cement Ltd.3,
to mean 'intended for use'. According to this decision the object of grant of exemption was

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only to debar those importer/manufacturers from the benefit of the Notifications who had
diverted the products imported for other purposes and had no intention to use the same for
manufacture of the specified items at any stage.

3. In the circumstances, the appeal is allowed but without any order as to costs.

11999 Indlaw CEGAT 4285
22002 Indlaw CEGAT 1534
31987 (Supp.l) SCC 679

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