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2017 (9) TMI 77 - AT - Central ExciseBenefit of N/N. 32/97 and N/N. 34/97 - DEPB benefit - jobbing - the appellants had availed benefit of both the N/N. 32/97 (jobbing) as well as N/N. 34/97 (DEPB) - case of Revenue is that imports under N/N. 32/97 are basically for jobbing and therefore such exports could not be made under DEPB N/N. 34/97 - whether beneficial duty exemption provided under N/N. 32/97-Cus. can be denied even when substantive fulfilment of the conditionalities of that notification have been fulfilled, only on the ground that dual benefit under N/N. 32/97-Cus as also DEPB credit benefit under N/N. 34/97-Cus. cannot be availed? Held that - the Tribunal in Sierra Trading (P) Ltd. 2011 (3) TMI 82 - CESTAT, CHENNAI , has held that benefit of N/N. 32/97-Cus. could not be denied - following the ratio set down by the Tribunal in the Sierra Trading case, especially when department has not filed any appeal against allowing of DEPB under N/N. 34/97-Cus., the benefit of N/N. 32/97-Cus. cannot be denied to the appellant - benefit allowed - appeal allowed - decided in favor of appellant.
Issues:
- Eligibility of Notification No.32/97 for duty-free imports for jobbing and re-exports - Applicability of DEPB credit under Notification No.34/97 for goods imported under Notification No.32/97 - Compliance with conditionalities of Notification No.32/97 for duty-free imports - Interpretation of DEPB scheme in relation to customs duty exemption on imported goods - Consideration of Tribunal decisions in similar cases Analysis: 1. The case involved M/s. Marina Shoes Pvt. Ltd. importing unit soles made of polyurethane for jobbing under Notification No.32/97-Cus. but failed to produce required end-use certificates for re-export as ladies shoes/sandals. The jurisdictional authorities raised demands for duty payment due to non-compliance, which were confirmed in Orders-in-Original. The Commissioner (Appeals) upheld the original authority's decision. 2. During the hearing, the appellant's counsel argued that the only issue was the eligibility of Notification No.32/97 for duty-free imports for jobbing and re-exports, distinct from DEPB credit under Notification No.34/97. The counsel cited a Tribunal decision in Sierra Trading case to support the appellant's position. 3. The respondent's representative supported the adjudication order, maintaining the department's stance on the matter. 4. The Tribunal referred to a previous decision in Presidency Kid Leather case, highlighting that DEPB benefit does not apply to goods imported under Notification No.32/97 for jobbing. The Tribunal emphasized that DEPB eligibility requires imported goods to have incurred customs duty, which was not the case for duty-free imports under Notification No.32/97. 5. The Tribunal further discussed the Sierra Trading case, where it was held that Notification No.32/97 exemption could not be denied even if DEPB benefit was sanctioned. The Tribunal emphasized that while DEPB benefit may not apply, the duty exemption under Notification No.32/97 should be granted if all conditionalities are met, even if DEPB benefit was availed. 6. Following the Sierra Trading precedent and considering that the department did not appeal the DEPB benefit under Notification No.34/97, the Tribunal set aside the impugned order and allowed the appeals to grant customs duty exemption under Notification No.32/97-Cus. This detailed analysis showcases the legal interpretation and application of Notification No.32/97 and DEPB credit under Notification No.34/97 in the context of duty-free imports for jobbing and re-exports, emphasizing compliance with conditionalities and previous Tribunal decisions for guidance.
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