2010 (1) TMI 826 - AT - Customs

Exemption under Notification No. 174/66 - appellant exported Rotor with Rotor Heat shield for repairs and re-imported after repairs - Held that - scrap generated in repair of rotors abroad and under re-import, they are not covered by Sl. No. 3 of the Table to the said Notification as claimed. These are not goods of Sl. No. 1 imported after exports under claim for rebate, under bond, under DEPB or under Drawback. These are Goods, other than those falling under Sl. No. 1, exported for repairs abroad of Sl. No. 2 of the Table to the Notification No. 94/96. Accordingly, the claim of the appellants in this regard is rejected. The appeal is disposed of.

Summary

Issues:
1. Applicability of Notification No. 174/66 vs. Notification No. 94/96 for re-imported goods.
2. Valuation of damaged goods and applicability of Foreign Trade Policy.
3. Eligibility for exemption under Notification No. 21/02 and 26/03.
4. Assessment of re-imported rotors and scrap goods under relevant notifications.

Analysis:
1. The appellant re-imported a Rotor with Rotor Heat shield for repairs and claimed full exemption under Notification No. 174/66, applicable to goods not produced in India and private personal property. However, the adjudicating authority applied Notification No. 94/96 due to damaged parts not being personal or private property.

2. The damaged goods were restricted for re-import under Foreign Trade Policy 2004-2009, leading to revaluation based on scrap value. The adjudicating authority confiscated the goods, offering redemption on payment of a fine and imposing a penalty. The Commissioner (Appeals) upheld this decision but allowed exemption under Notification No. 21/02 and 26/03 for re-imported goods after repairs.

3. Upon remand, it was found that the scrap generated during rotor reconditioning was freely importable under the Foreign Trade Policy. However, the importation did not qualify for exemption under Notification No. 21/02 and 26/03. The Commissioner (Appeals) upheld this decision, emphasizing that unusable scrap from repairs did not qualify as goods for renovation or modernization.

4. The Tribunal considered the re-imported rotors eligible for assessment under Notification No. 21/02-Cus. However, the scrap goods from repair abroad did not qualify for exemption under Notification No. 94/96, as they were not goods exported for repairs abroad under specific conditions. Thus, the appeal was dismissed, confirming the assessment of the re-imported goods and rejecting the claim for exemption on scrap goods.