2015 (10) TMI 1908 - AT - Customs

Export of readymade garments - whether the hangers exported along with garments are entitled to benefit of draw-back? - Held That - The object of imports being to export readymade garments but not the hanger the hanger is excludible from the benefit of draw back. - Appellant liable to return back the drawback claimed - Redemption fine reduced to ₹ 50,000/- - No penalty charged on importer as the case involves interpretation of law - Decided in favour of assessee.

Summary

Issues:
1. Entitlement of hangers exported with garments to draw-back benefit.
2. Imposition of redemption fine for export under an incentive scheme.
3. Penalty imposition on M/s. Namdev Exports and Shri Kunj Bihari Chhipa.

Entitlement of Hangers to Draw-back Benefit:
The core issue revolved around whether hangers exported alongside garments are eligible for draw-back benefits. The Tribunal deliberated that since the primary purpose of the imports was for exporting readymade garments and not the hangers, the hangers were deemed ineligible for draw-back benefits. Consequently, the appellant was directed to refund the draw-back amount claimed on the hangers to the Department. Notably, any deficiency in the amount appropriated during the investigation would necessitate further recovery proceedings.

Imposition of Redemption Fine:
Regarding the imposition of a redemption fine for export under an incentive scheme, the Tribunal acknowledged the established legal principle that such fines are applicable for violations under such schemes or bonds. Despite this, based on a holistic assessment of the case's facts and circumstances, the redemption fine was reduced to Rs. 1.00 Lakh. Additionally, the penalty imposed on M/s. Namdev Exports was mitigated to Rs. 50,000 due to their cooperation in the proceedings and acknowledgment that hangers were not entitled to draw-back claims.

Penalty Imposition on Shri Kunj Bihari Chhipa:
In the case of Shri Kunj Bihari Chhipa, the Tribunal determined that as an interpretation of the law was involved, no penalty would be levied on him. Consequently, the appeal of Chhipa was allowed, and the appeal of Namdev Exports was partially allowed.

This comprehensive analysis of the judgment highlights the Tribunal's decisions on the entitlement of hangers to draw-back benefits, the imposition of redemption fines, and the penalties imposed on the involved parties, providing a detailed insight into the legal intricacies and outcomes of the case.