2011 (11) TMI 200 - HC - Customs

Denial of exemption provided under Notification No.93 of 2004, Customs dated 10.9.2004 - assessee imported raw material for the purpose of undertaking job work supplier later discontinued job work and asked to return the balance of imported parts whether benefit under Para 2.35 of the Foreign Trade Policy is available - Held that - The importer would be entitled to claim the benefit of exemption from payment of duty only as per the terms of the Notification and not otherwise. Therefore, exemption of benefit of the duty is not available in the event of re-exporting the un-utilised goods, as such exemption is not available as per the Notification, by which such import has been made. Further Clause 2.35 of Foreign Trade Policy contemplates a situation in general and not when the import or export is covered by a specific notification. As it is held that the assessee could re-export only as per the notification, they cannot rely the general clause relating to Foreign Trade Policy. - Decided in favor of Revenue.

Summary

Issues:
1. Interpretation of Notification No.93/2004 Cus-dated 10.09.2004 for exemption from duty.
2. Extending benefit under Para:2.35 of the Foreign Trade Policy.
3. Compliance with Supreme Court ruling in the case of Indian Ryon & Industries Ltd.
4. Tribunal's authority to allow exemption based on duty drawback provisions.

Analysis:

Issue 1:
The case involves the interpretation of Notification No.93/2004 Cus-dated 10.09.2004, which grants exemption from duty for imported products under specific conditions. The respondent imported printing machinery parts for job work but faced challenges due to the supplier's decision. The Tribunal allowed the exemption based on the conditions of the Notification, emphasizing the obligation to re-export defective goods within a specified timeframe.

Issue 2:
Regarding the benefit under Para:2.35 of the Foreign Trade Policy, the Tribunal considered whether the importer could re-export goods without duty payment. The court highlighted that the importer must adhere to the Notification's terms, not general trade policies, to claim duty exemption. The Tribunal's decision was based on specific conditions outlined in the Notification, not general trade provisions.

Issue 3:
The case raised the question of compliance with a Supreme Court ruling in the case of Indian Ryon & Industries Ltd. The court emphasized that importers must strictly follow the Notification's conditions to claim benefits. The Tribunal's decision aligned with the Supreme Court's stance on the necessity of adhering to Notification terms for duty exemptions.

Issue 4:
The Tribunal's authority to allow exemption based on duty drawback provisions was also questioned. The court clarified that importers must meet the Notification's conditions for duty exemption, emphasizing that re-export without fulfilling specific criteria outlined in the Notification is not permissible. The Tribunal's decision was based on the Notification's provisions, not duty drawback rules.

In conclusion, the court ruled in favor of the Revenue, stating that the importer was not entitled to duty exemption for re-exporting unused goods as per the Notification's conditions. The judgment emphasized the importance of strict compliance with Notification terms for claiming duty benefits, rejecting reliance on general trade policies.