2006 (11) TMI 113 - HC - Customs

Duty levied on fabrics imported under Duty Exemption Scheme Direct export from job worker premises Export is evidenced by shipping bills & job worker of assessee were duly verified by custom authority Held that duty & penalty is not leviable as export obligation have been duly met by assessee

Summary

Issues:
Delay in filing the appeal, distinction between procedural and substantive conditions, imposition of duty and penalty for violation of procedures under Duty Exemption Scheme.

Delay in Filing Appeal:
The judgment begins by condoning the delay of 22 days in filing the appeal, supported by an affidavit of the appellant's counsel. Additionally, a further delay of 16 days in re-filing the appeal is also condoned. The court then proceeds to hear the appeal on its merits.

Interpretation of Duty Exemption Scheme:
The case revolves around the import of woollen fabrics under the Duty Exemption Scheme for conversion into suits for export. The department levied duty on fabrics used in suits exported directly from the job worker premises, arguing that the fabrics should have been brought to the assessee's factory before export. The appellate authority upheld the duty imposition, but the Tribunal ruled in favor of the assessee, stating that the export was duly verified by custom authorities, fulfilling the export obligation under the Scheme.

Procedural vs. Substantive Conditions:
The revenue contended that the obligation to export goods only after bringing them to the assessee's factory was procedural and technical, justifying the duty imposition and penalty. However, the court disagreed, emphasizing that the Tribunal had verified the export and found the assessee to have fulfilled its obligations under the Scheme. The court held that in such circumstances, the imposition of duty or penalty was unwarranted.

Final Decision:
The court dismissed the revenue's appeal, stating that no question of law arose from the Tribunal's decision. It affirmed the Tribunal's ruling, concluding that the view taken was not erroneous, and therefore, no duty or penalty should be imposed on the assessee.