2018 (6) TMI 1375 - AT - Customs

Delay in re-export of goods after processing Benefit of N/N. 158/95-Cus dated 14.11.1995 - denial of benefit on the ground of delay in re-export of goods within stipulated time - Held that - The mere fact that it is statutory does not matter one way or the other. Some conditions may be substantive, mandatory and based on considerations of policy and some other may merely belong to the area of procedure. It will be erroneous to attach equal importance to the non-observance of all conditions irrespective of the purposes they were intended to serve. It is not in dispute that the goods were finally exported - appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Export of goods for reconditioning without payment of duty
2. Demand of customs duty for non-fulfillment of exemption notification conditions
3. Appeal against adjudication order confirming duty demand, interest, and penalty

Analysis:

Issue 1: Export of goods for reconditioning without payment of duty
The case involved the export of "Hot Dip Galvanized Steel Bars and Rods" to the USA, which were later imported back for reconditioning without duty payment, under Exemption Notification No.158/95-Cus dated 14.11.1995. The appellant executed a bond and bank guarantee for the re-importation process. After re-importation, the goods underwent further processes to meet foreign buyers' requirements and were subsequently re-exported. The Customs authorities issued a Show Cause Notice demanding duty, interest, confiscation of goods, and penalty for non-compliance with the exemption conditions.

Issue 2: Demand of customs duty for non-fulfillment of exemption notification conditions
The Adjudicating Authority confirmed a duty demand of ?2,10,181/- along with interest and ordered the appropriation of a bank guarantee for ?52,545/-. On appeal, the Commissioner (Appeals) upheld the duty demand and adjudication order, leading to the present appeals before the Tribunal.

Issue 3: Appeal against adjudication order
The appellant's counsel argued that the impugned order failed to consider the substantial benefit extended to the appellant during the export, emphasizing delays in re-export due to various factors beyond their control. The counsel cited case laws and contended that the delay was condoned by customs officials during the export process. The Departmental Representative relied on Notification No.158/95-Cus and the decision in Commissioner of Central Excise vs. Mahaan Dairies [2004(166) ELT 23 (S.C.)]. After hearing both parties and reviewing the records, the Tribunal referred to precedents emphasizing liberal interpretation of export promotion schemes to avoid defeating their purpose due to technical lapses.

The Tribunal noted that the substantive fact of actual export was not in dispute, and the delay in re-export was due to unavoidable circumstances. Citing various legal precedents, including decisions by the Supreme Court and the Tribunal, the Tribunal set aside the impugned order and allowed the appeals filed by the appellant, granting consequential relief.