2016 (12) TMI 11 - AT - Customs

Import of exported goods for re-processing and thereafter export - N/N. 158/95-Cus 14.11.1995 - re-assessment of consignment under N/N. 94/96-Cus. - whether the appellant, in case of non-fulfilment of the condition of Notification No. 158/95-Cus. dated 14.11.1995, is entitle for the alternate Notification No. 94/96-Cus.? - Held that - though the appellant re-imported exported goods claiming the Notification No. 158/95-Cus. and executed the Bond and bank guarantee but due to unavoidable reason could not re-export the said goods. Therefore the appellant claimed the alternate exemption Notification No. 94/96-Cus. In our view, there is no reason to deny the alternate exemption notification. If the importer fails to comply with the condition of the notification which was claimed at the time of import, the duty is required to be paid as per the rate applicable and as per any other notification, if available to the imported goods. Only because the notification was not claimed at the time of import and claimed later on, the legitimate exemption, which otherwise available under the statute, cannot be denied. This issue has been settled in the various judgments. In the case of SHARE MEDICAL CARE Versus UNION OF INDIA 2007 (2) TMI 2 - SUPREME COURT OF INDIA , the Hon ble Supreme Court has held that alternate Notification No. 65/88-Cus should be allowed, if the exemption Notification No.64/88-Cus claimed at the time of import is not admissible due to non-fulfilment of the post import condition. The fact of the present case is also identical in as much as the appellant could not comply the post import condition of re-export of the goods within stipulated period. Hence the issue in hand is squarely covered by the above referred Hon ble Apex Court judgment. The appellant is entitle for alternate exemption Notification No.94/96-Cus subject to it s eligibility. The Assistant Commissioner has not considered the eligibility of the said notification, which needs to considered - appeal allowed.

Summary

Issues:
1. Applicability of alternate Notification No.94/96-Cus in case of non-fulfillment of Notification No. 158/95-Cus conditions.

Analysis:
The case involved the export and re-import of goods by the appellant under different customs notifications. The appellant exported Cinnazine to Switzerland and re-imported the same for reprocessing and re-export under Notification No. 158/95-Cus. Due to unavoidable circumstances, the appellant could not re-export the goods within the stipulated time period and requested reassessment under alternate Notification No. 94/96-Cus. The Assistant Commissioner rejected the request, leading to a demand for the duty forgone. The appellant appealed against this decision. The key issue was whether the appellant was entitled to claim the alternate exemption under Notification No. 94/96-Cus after failing to fulfill the conditions of Notification No. 158/95-Cus.

The appellant argued that even if the alternate notification was claimed later, it should be allowed as per settled law. They cited various judgments supporting their position, emphasizing that legitimate exemptions should not be denied based on the timing of the claim. The Tribunal agreed with this argument, citing the Supreme Court's decision in Share Medical Care case, which allowed an alternate notification when the initial exemption could not be granted due to non-compliance with post-import conditions. The Tribunal found the present case to be similar, where the appellant failed to meet the re-export condition within the specified period.

On the other hand, the Revenue contended that the duty foregone should be paid as the appellant did not re-export the goods within the stipulated time, even with an extension. They relied on judgments where exemptions were denied for non-compliance with re-export conditions under Notification No. 158/95-Cus. The Tribunal distinguished these cases, noting that the appellant was seeking relief under an alternate notification, not under the same notification for which conditions were not met.

Ultimately, the Tribunal held that the appellant was entitled to the alternate exemption under Notification No. 94/96-Cus, subject to eligibility. They emphasized that the Assistant Commissioner had not considered the eligibility of this notification, which needed to be assessed. Consequently, the impugned order was set aside, and the appeal was allowed in favor of the appellant.