Per S.S. Kang : Revenue filed this appeal against the order in appeal passed by the Commissioner (Appeals).

2. Brief facts of the case are that the appellants are engaged in the manufacture of Colour Picture Tubes. The appellants made an import of certain goods after claiming the benefit of Notification No. 36/96-Cus. (NT) dated 23.7.96. After clearances of the goods imported by the appellant, the goods were damaged during the transit to their factory. A show cause notice was issued to the appellant for demand of custom duty on the ground that the damaged goods were not used for the purpose for which they are imported, hence the concessional rate of duty as per notification is not available to the respondents. The adjudicating authority confirmed the demand and imposed the penalty and also demanded interest. The respondents filed appeal, the Commissioner (Appeals) vide impugned order allowed the appeal.

3. Heard both sides.

4. The contention of the Revenue is that the respondents are entitled to the rate of custom duty as per the provisions of notification if the goods were used for the manufacture of Picture Tubes as the imported goods were for the manufacture of picture tubes. Therefore, the benefit of the notification is not available to the respondents.

5. The respondents submitted at the time of the import of the goods that they are entitled for the concessional rate of duty and the goods were damaged after clearances which is beyond the control of the respondents. The appellants also relied upon the decision of the Tribunal in the case of National Organic Chemical Indus. Ltd. Vs. C.C. (Import) Mumbai, reported in 2000 (126) ELT 1072 (Tribunal). The respondents also submitted that in case the demand is confirmed it is not the case of imposition of penalty and demand of interest.

6. In this case the respondents made an import of parts of picture tubes and as per the Notification No. 36/96-Cus. (NT) dated 23.7.96 if the parts of picture tubes are imported for use in the manufacture of picture tubes are entitled for concessional rate of custom duty. The respondents claimed the benefit of notification in respect of the parts of picture tubes. The imported parts of the picture tubes were damaged during transit. These facts are not disputed by the respondents. As the parts imported by the appellants after claiming the benefit of notification are not used in the manufacture of picture tubes, hence the benefit of notification is not available to the respondents. The respondents relied upon the decision of the Tribunal in the case of National Organic Chemical Indus. Ltd. Vs. C.C. (Import), Mumbai (Supra) where while interpretating the notification No. 187/61-CE dated 23.12.1961 the Tribunal held that when the goods are intended for use in the manufacture of final product and there was some shortage due to leakage, the benefit of notification cannot be denied. The facts of the present case are different. Hence the ratio of the case relied upon by the respondents is not applicable to the facts of the present case. After taking into consideration the facts and circumstances of the case, we find that imposition of penalty and demand of interest is not sustainable as it is not the case of the Revenue that goods were misused contrary to the provisions of the notification. The appeal is allowed as indicated above.