2017 (1) TMI 1727 - AT - Customs

Benefit of exemption N/N. 104/94-Cus., dated 16-3-1994 - flexitanks imported by the appellant was not re-exported by the same appellant with necessary processing thereto - HELD THAT - Exemption is granted at the cost of the public. Any interpretation of the notification to the disadvantage of public interest shall result in breach of public trust. When the appellant executed bond to carry out certain obligations, non-fulfillment of such condition negates the claim to the notification benefit. Appellant is obligated under law to carry out the mandate thereof. Benefit of the notification cannot be interpreted liberally unless the appellant first satisfies the basic condition of the notification - Appellant failed to do so and having gained the benefit of import duty at the time of import, it was duty bound under law to make export of the processed goods without passing on the goods to a third party, who was stranger to Revenue at the time of import. Appeal dismissed.

Summary

Issues:
Whether non-re-export of "flexitanks" by the appellant disentitles them to the benefit of exemption Notification No. 104/94-Cus., dated 16-3-1994.

Analysis:
The judgment by the Appellate Tribunal CESTAT CHENNAI dealt with the issue of whether the appellant, who imported "flexitanks" but did not re-export them after necessary processing, was entitled to the benefit of exemption under Notification No. 104/94-Cus., dated 16-3-1994. The appellant did not carry out any processing of the goods nor exported them; instead, a third party was involved in the export process. The Revenue contended that the appellant's failure to re-export the goods as per the conditions of the notification and the bond executed at the time of import deprived them of the exemption benefit. The Tribunal held that non-fulfillment of the bond condition negated the appellant's claim to the notification benefit, emphasizing that exemptions are granted at the cost of public interest and must not be interpreted to the disadvantage of the public.

The Tribunal reviewed the order of the learned Commissioner (Appeals) and the appellant's grounds of appeal. The appellant argued that the Commissioner's order was inconsistent and arbitrary, but failed to raise specific grounds in defense. The Tribunal noted that the appellant's failure to fulfill the basic condition of the notification, despite gaining import duty benefits, meant they were obligated under the law to export the processed goods without involving a third party. The Tribunal emphasized that the appellant must satisfy the notification's basic conditions before claiming the benefit, and failure to do so would result in the loss of the exemption benefit. The judgment highlighted that the appellant's actions breached the public trust as exemptions should not be interpreted liberally to the detriment of public interest.

In conclusion, the Tribunal dismissed the appeal, emphasizing that the appellant's failure to fulfill the bond condition and export the processed goods as required by the notification resulted in the loss of the exemption benefit. The judgment underscored the importance of upholding obligations under the law and ensuring that exemptions are not misused to the disadvantage of public interest.