2015 (11) TMI 1499 - AT - Customs

Denial of duty benefit under Customs Notification No. 94/96 -Cus. dated 16/12/96 - Reimport of goods - whether the appellants are eligible for the nil rate of duty as envisaged in notification number 94/96 -Cus. benefit of which was claimed by them while re-import of a consignment of gold jewellery exported earlier for exhibition abroad - Held that - Condition of 60 days, as provided in the foreign trade policy, is not a prohibition and we further hold that as the goods have been re-imported within a period of 6 months as provided in the notification, read with the foreign trade policy, the appellant is entitled to the benefit of exemption notification number 94/96 Cus. Thus, the appeal is allowed in favour of the appellant with consequential benefits. We direct the concerned authority, the Commissioner of Customs, C.S.I. Airport, Mumbai to release the goods in question, within seven days of receipt or production of a copy of this order. The impugned order is set aside. - Decided in favour of assessee.

Issues:
1. Eligibility for nil rate of duty under notification number 94/96 -Cus.
2. Change in ownership of goods affecting exemption eligibility.
3. Confiscation of goods under section 111(o) of the Customs Act, 1962.
4. Penalty under section 112(a) of the Customs Act, 1962.
5. Interpretation of conditions under the exemption notification.
6. Compliance with the time limit for re-importation of goods.

Eligibility for Nil Rate of Duty:
The appellant sought nil rate of duty benefit under notification number 94/1996Cus. for re-importing goods exported earlier. The Commissioner denied the exemption due to a perceived change in ownership of the goods. The appellant argued that the goods' identity was established, meeting the conditions of the notification. The Tribunal agreed, holding that the conditions stipulated by the Commissioner were not in line with the notification's provisions. The Tribunal ruled in favor of the appellant, allowing the exemption and directing the release of the goods.

Change in Ownership Impacting Exemption:
The Commissioner based the denial of exemption on a change in ownership of the goods, contrary to the notification's conditions. The appellant contended that the goods' identity was maintained, fulfilling the exemption criteria. The Tribunal found the Commissioner's reasoning flawed and ruled in favor of the appellant, stating that the change in ownership did not disqualify them from the exemption under the notification.

Confiscation under Section 111(o) of the Customs Act:
The Commissioner invoked section 111(o) of the Customs Act, 1962, for confiscating the goods due to non-compliance with the re-import time limit. The appellant argued that the time limit was not a prohibition and that the goods were re-imported within a reasonable period. The Tribunal agreed with the appellant, holding that the goods were re-imported within the specified timeframe, entitling the appellant to the exemption and ordering the release of the goods.

Penalty under Section 112(a) of the Customs Act:
A penalty was imposed on the appellant under section 112(a) of the Customs Act for attempting to claim duty-free re-import despite missing the deadline. The Tribunal found that the appellant, although aware of the deadline breach, was eligible for the exemption under the notification. The penalty was not upheld, and the Tribunal ruled in favor of the appellant, allowing the appeal and ordering the release of the goods.

Interpretation of Exemption Notification Conditions:
The Tribunal analyzed the conditions specified in notification number 94/96 -Cus. and clarified that the 60-day time limit for re-importation was not a prohibition. The Tribunal emphasized that the goods were re-imported within the stipulated period, making the appellant eligible for the exemption under the notification. The impugned order was set aside, and the goods were directed to be released.

Compliance with Time Limit for Re-Importation:
The Commissioner cited non-compliance with the 60-day time limit for re-importing the goods as the basis for confiscation. The appellant argued that the time limit was not a strict prohibition and that the goods were re-imported within a reasonable timeframe. The Tribunal agreed with the appellant, allowing the appeal and directing the release of the goods within seven days.

This comprehensive analysis of the judgment covers all the issues involved, detailing the arguments presented by both parties and the Tribunal's findings and rulings for each aspect of the case.

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