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Issues involved: Interpretation of Customs duty on returned goods u/s Notification No. 158/95-Cus. and applicability of Tribunal rulings.
The appellant exported cotton yarn to UAE, which was returned for reprocessing. They filed re-export bonds u/s Notification No. 158/95-Cus. for reprocessing within six months but failed to comply. The Commissioner confirmed the OIO demanding Customs duty. The revenue sought to recover Customs duty based on the re-export bonds, contended by the assessee who argued that since they cleared the goods by paying Central Excise duty, Customs duty on returned goods was not applicable. They relied on the Calcutta High Court ruling in Indian Rayon & Industries Ltd. v. CC, Calcutta, 2002 (145) E.L.T. 575 (Tri. - Kol). The Commissioner disagreed, citing the matter being taken to the Supreme Court. The Tribunal referred to the Bombay High Court's decision in Vidarbha Vineer Industries, stating that the mere filing of an appeal by the Department does not nullify the order appealed against, and the Department must adhere to Tribunal rulings. The Tribunal upheld the Indian Rayon Industries ruling, emphasizing that when goods are cleared domestically with duty paid, Customs duty recovery is not warranted. The duty calculation was found correct u/s Notification No. 94/96, aligning with Indian Rayon Industries. The Commissioner's decision was overturned, and the appeal was allowed with any necessary relief.
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