Case Law Details
Xomox Sanmar Ltd Vs Director General of Foreign Trade (Madras High Court)
Madras High Court held that by including processes such as refrigeration, re-packing, polishing, labelling, re-conditioning repair, remaking, refurbishing, testing, calibration and re-engineering within the ambit of manufacture, the legislature clearly intended an expansive understanding of what constituted ‘manufacture’ for the purposes of ‘deemed export’.
Facts- The petitioner claims to be engaged in the manufacture of industrial valves and clears the final products both domestically as well as to the export market. The petitioner had received a purchase order from M/s.Thyssenkrupp on 22.06.2010 for supply of 1451 numbers of Gate, Globe and Check valves (‘industrial valves’ in short).
The supply was to be effected to Anrak Aluminium, a unit in a Special Economic Zone in Vizag and since Thyssenkrupp had an advance authorisation from the Customs Department, the import was made by the petitioner without payment of customs duty on 17.01.2011. The advance authorisation, on the strength of which the inputs were imported without customs duty, was specific to the condition that the petitioner must use those inputs for manufacture.
R1 sought details from the petitioner in regard to the operational/manufacturing activities that it carried out and the petitioner duly supplied the particulars called for. By a communication dated 15.09.2011, the stand of the petitioner was rejected, R1 being of the view that the items imported and ultimately exported were one and the same and there was no manufacturing activity involved that brought into existence a new product with a distinctive identity and name.
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