2024 (4) TMI 482 - AT - Customs

Failure to re-export the goods after re-import - Benefit of exemption from customs duty - Change of Notification in the bill of entry - Recovery of Drawback - Exports leather shoes - goods returned for repair of the shoes - failed to comply with the condition of re-exporting the goods - Whether the appellant is eligible for the benefit of Notification No.94/96 although they have not claimed the said benefit at the time of import of goods - HELD THAT - From the facts it can be seen that that the appellant had intended to re-export the goods after repair of the shoes. However they could not fulfil this requirement and thereafter sold the goods locally. They then requested the department to extend to them the benefit of Notification No.94/96. The department has not considered the same observing that the appellant has availed drawback and claimed benefit of Notification No.158/95 at the time of import of the goods. On similar set of facts the Tribunal in the case of Olam Agro India Ltd. 2024 (2) TMI 317 - CESTAT AHMEDABAD had considered the very same issue and held that the appellant would be eligible for alternate beneficial notification. The decision of the Hon ble Supreme Court in the case of Share Medical Care 2007 (2) TMI 2 - SUPREME COURT held that assessee cannot be denied the benefit of alternate notification when it is eligible at the time of import of the goods. Following the cited decisions (supra) we are of the view that the appellant is eligible for the benefit of Notification No.94/96. However it is made clear that the appellant has to pay back the drawback claimed by them along with interest. The impugned order is set aside. Appeal is allowed with consequential relief if any on the condition that appellant has to pay back drawback claimed.

Summary

Issues:
The judgment involves the eligibility of the appellant for the benefit of Notification No.94/96 despite not claiming it at the time of import, and the requirement for the appellant to return the drawback claimed by them if the benefit is allowed.

Eligibility for Benefit of Notification No.94/96:
The appellant exported leather shoes under drawback claim, which were returned for repair by the foreign buyer. Subsequently, the appellant cleared the items under Bills of Entry availing benefits under Notification No.158/95. The appellant later requested consideration for eligibility under Notification No.94/96 as they could not re-export the goods within the stipulated period, even though they had initially availed benefits under Notification No.158/95. The adjudicating authority and Commissioner (Appeals) rejected the request, citing non-compliance with the re-export condition of Notification No.158/95. The appellant argued that they should be allowed to alternatively claim the benefit of Notification No.94/96, as per a Tribunal decision in a similar case. The Tribunal, relying on the decision in Share Medical Care Vs Union of India, held that the appellant is eligible for the benefit of Notification No.94/96, provided they return the drawback claimed along with interest. The impugned order was set aside, and the appeal was allowed with consequential relief, subject to the condition of repaying the drawback claimed.

Return of Drawback Claimed:
The Department pointed out that if the appellant is allowed the benefit of Notification No.94/96, they would be required to return the drawback claimed by them. The Tribunal, after considering the arguments from both sides, held that the appellant is indeed eligible for the benefit of Notification No.94/96, but emphasized the obligation for the appellant to repay the drawback claimed, along with interest. The decision was based on the appellant's failure to fulfill the re-export requirement and their subsequent local sale of the goods. The Tribunal's ruling was in line with the principles established in previous cases and the legal precedent set by the Hon'ble Supreme Court, ensuring that the appellant is entitled to the alternate beneficial notification under the given circumstances.

This judgment by the Appellate Tribunal CESTAT CHENNAI addressed the appellant's eligibility for the benefit of Notification No.94/96, the requirement for repayment of drawback claimed, and the application of legal principles established in previous cases and the Hon'ble Supreme Court's decision in Share Medical Care Vs Union of India.