2017 (2) TMI 140 - AT - Customs

Concessional rate of duty - Import of Goods at Concessional Rate of Duty for Manufacture of Excisable Goods - the appellant exported 8,254 Nos. of LCD Panels on which the exemption under the said Notification was allowed at the time of importation wherein duty forgone under the claim of said Notification was ₹ 78,53,643/-. It appeared to Revenue that under Rule 8 of said Rule 8,254 Nos. of LCD Panels were not accounted for by the appellant and therefore ₹ 78,53,643/- was recoverable from appellant u/r 8 of the said Rules. Held that - for the period subsequent to the period of SCN the said Rules were amended wherein it was provided that the imported goods which could not be utilized can be re-exported. Though the said provision was not applicable to the period for which the SCN was issued, the principle involved in the said provision should be applicable for all the material periods. It may be reasonable that if the goods on importation are re-exported, as such then they should be treated as if were never imported. In that event, Rule 8 of the said Rules will not be applicable - appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Interpretation of Customs (Import of Goods at Concessional Rate of Duty for Manufacture of Excisable Goods) Rules, 1996.
2. Application of Rule 8 for recovery of duty.
3. Impact of Rule 7A introduced in the said Rules.
4. Re-export of unutilized imported goods.
5. Treatment of re-exported goods under Rule 8.

Analysis:
The appeal was filed against Order-in-Original No. 50/COMMISSIONER/NOIDA/2012-13 dated 24.12.2012. The case involved the registration of the appellants under Customs Rules for import of goods for manufacturing L.C.D. TVs at a concessional duty rate. The issue arose when the Revenue discovered discrepancies in the export of LCD Panels against the imported quantity, leading to a demand of duty recovery under Rule 8. The Original Authority upheld the demand, along with interest and penalty. The appellant challenged this decision before the Tribunal.

The appellant argued that Rule 7A, introduced after the relevant period, allowed re-export of unutilized imported goods. They contended that re-exported goods without use should be considered as if they were never imported, exempting them from Rule 8 recovery provisions. On the other hand, the Department supported the Order-in-Original.

After considering the arguments, the Tribunal acknowledged the post-period amendment allowing re-export of unutilized goods. Despite the inapplicability of this provision to the relevant period, the Tribunal applied the underlying principle to all material periods. They concluded that goods re-exported in their original state should be treated as if they were never imported, rendering Rule 8 inapplicable. Consequently, the Tribunal set aside the Order-in-Original, allowing the appeal in favor of the appellant. The judgment was pronounced and dictated in open court.