2005 (3) TMI 518 - AT - Customs

Summary

Issues:
1. Failure to export re-imported goods within the specified time frame.
2. Demand for duty recovery and interest under Section 47(2).
3. Consideration of entitlement to drawback under Section 74.
4. Oversight by Customs Officers leading to delay in export.
5. Applicability of interest under Section 47(2).

Analysis:
1. The appellants re-imported goods under a specific notification that required them to export the goods within six months of re-importation. However, they failed to meet this deadline and requested an extension, which was granted with a new deadline of 13-11-1998. The goods were eventually exported on 7-6-1998. The issue at hand was the failure to export within the initial deadline and the subsequent duty recovery proposed by the authorities.

2. After hearing both sides, it was noted that the re-imported goods had indeed been exported, albeit with a delay. The Customs House file revealed that an extension had been granted for re-export until 13-11-1998. The oversight in the extension date was attributed to a mistake by Customs Officers. The Tribunal found that the delay in export should have been condoned, and there was no basis for upholding the duty demands as calculated.

3. The Tribunal highlighted that Customs Law does not allow for the recovery or retention of duty on goods that are to be transited, transhipped, or temporarily imported and not consumed in India. In this case, since the goods were eventually exported, the appellants would have been entitled to a drawback if they had paid the duty on import. Therefore, the duty demands were deemed unjustified, and the Tribunal suggested calculating only the difference between the duty payable and the drawback eligible on the quantity exported 23 days late.

4. Considering the oversight by Customs Officers at senior levels that led to the delay in export, the Tribunal emphasized that burdening the exporter with duty and interest would not be just. Therefore, the matter was remitted back to the Customs House for reconsideration, focusing on the difference in duty payable and drawback entitled under Section 74, with the duty deemed to be paid on the actual extension date of 13-5-1998.

5. Lastly, the Tribunal ruled that interest under Section 47(2) could not be upheld in this case, given the circumstances and the eventual export of the goods. The appeal was allowed, with a direction to calculate and appropriate the amount based on the terms outlined in the judgment.