2007 (7) TMI 457 - AT - Customs

Summary

Issues:
1. Claim of benefit under Notification No. 20/99 for exemption from Basic Customs Duty and Additional Duty of Customs.
2. Allegation of diversion of imported labels to the domestic market.
3. Show Cause Notice issued for recovery of exemption availed, interest, and penalty.
4. Claim of demand being barred by limitation due to a bona fide belief of eligibility for exemption.
5. Interpretation of the term "bona fide exporters" in the context of the relevant notifications.
6. Lack of representation by the appellants during the proceedings.

Analysis:

1. The case involved M/s. Arvind Fashions Ltd. importing leather labels under Notification No. 20/99 claiming exemption from customs duties for bona fide exporters. However, an investigation revealed a suspicion of diversion of labels to the domestic market, leading to a Show Cause Notice for recovery of availed exemptions, interest, and penalties.

2. The appellants argued that their claim was made in good faith without any intention to evade duty. They contended that being considered bona fide exporters did not require a specific volume of exports as per the legislative history of relevant notifications. The Commissioner found the appellants' export volume negligible, leading to the denial of the exemption.

3. Despite the absence of representation by the appellants during the proceedings, the Tribunal considered their submissions and the findings of the adjudicating authority. The Tribunal noted that the relevant notifications did not specify a minimum export volume requirement to qualify as a bona fide exporter for exemption benefits.

4. The Tribunal concluded that as long as the appellants were exporters, they were entitled to the exemption benefits under the notifications. Since the denial of benefits was solely based on the volume of exports, which was not a specified criterion in the notifications, the impugned order was set aside, and the appeal by M/s. Arvind Fashions Ltd. was allowed.

5. The judgment emphasized the legal interpretation of "bona fide exporters" within the framework of the notifications and highlighted the absence of a specific export volume requirement for availing the exemption benefits, leading to the decision in favor of the appellant.