2018 (1) TMI 571 - AT - Customs

Benefit of Notification No. 158/95 - exported goods found defective imported for repair and subsequently re-exported - Held that - it is admitted that the goods have been re-exported within one year of re-import into India. The relevant date under N/N. 158/95 has been clarified by the Board vide Circular dated 03.06.97. Accordingly considering the date of actual clearance of goods on assessment of bill of entry of all the re-exports in the present case happened within one year. Regarding re-exports made after six months of re-import the appellant did not seek due extension from the Commissioner of Customs - Held that - the extension of time limit which is otherwise available as part of the terms of the said Notification should be considered as procedural in the present facts of the case. When the matter of export is not in dispute denial of exemption under N/N. 158/95 only on the ground of non availability of permission extending the time limit is not sustainable. Appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Whether the re-export of goods within a stipulated time frame is necessary to claim exemption under Notification No.158/95-Customs.
2. Whether the failure to seek an extension for re-export within the specified time period leads to the denial of exemption and imposition of duty.
3. Whether procedural lapses in seeking extension for re-export can result in the confirmation of duty demand.
4. Whether the denial of exemption solely based on the absence of permission for extending the time limit is justifiable.

Analysis:

1. The case involved a dispute regarding the re-export of goods within the stipulated time frame to claim exemption under Notification No.158/95-Customs. The appellant re-imported certain defective automobile components, which were subsequently re-exported after due repair. The Revenue contended that three shipping bills for re-export filed in March 2016 were beyond the six-month limit, leading to a duty demand of ?17,19,340.

2. The appellant argued that the goods were re-exported within one year of import and were not consumed in India, thus no customs duty should apply. The appellant acknowledged the procedural lapse of not seeking an extension for re-export after the initial six months but contested the duty imposition, citing various precedents to support their case.

3. The Revenue insisted on strict application of the notification's condition for re-export within six months of import, emphasizing that extensions require due requests and verification by the Commissioner. The appellant's failure to seek an extension was highlighted as a reason to deny automatic exemption.

4. The Tribunal analyzed the facts, noting that all re-exports occurred within one year of import clearance. The failure to obtain an extension was considered a procedural lapse, not fatal to claiming exemption. The Tribunal referenced a previous case to support its stance that denial of exemption solely based on the absence of permission for extending the time limit is not sustainable.

5. Ultimately, the Tribunal found the impugned order unsustainable, setting it aside and allowing the appeal due to the absence of any other import/export dispute. The decision emphasized that denial of exemption based solely on the lack of permission for extending the time limit was not justified, and procedural lapses should not lead to duty imposition when the goods were duly allowed for export.

In conclusion, the Tribunal ruled in favor of the appellant, highlighting the importance of considering procedural lapses within the context of exemption claims and re-export timelines under customs notifications.