2000 (8) TMI 827 - AT - Customs

Summary

Issues:
- Whether goods exported under bond and returned for reconditioning are allowed clearance without payment of Customs duty under Section 20 of the Customs Act, 1962.

Analysis:
The appeal before the Appellate Tribunal CEGAT, Kolkata revolved around the issue of whether Permanent Magnetic Chucks and Demagnetisers, exported under bond and returned for reconditioning, were eligible for clearance without payment of Customs duty under Section 20 of the Customs Act, 1962. The appellant, a manufacturer, exported these goods to a company in the U.S.A., but upon receipt, the foreign buyer found some pieces rusty and returned them to Calcutta. The appellant filed a Bill of Entry for duty-free import under Section 20, which was denied by the adjudicating authority and confirmed by the Commissioner (Appeals). The appellant argued that the prohibition in Section 20 applies only to goods manufactured in Customs bond under Section 65, not those exported under Central Excise bond. The Revenue contended that goods on re-importation are liable to Customs duty, countervailing duty, and restrictions under the Exim Policy, citing decisions from the Delhi and Mumbai Benches of the Tribunal.

The Tribunal analyzed the term "bond" in Section 20 and referred to the judgment of the Hon'ble High Court of Madras in a similar case. It was established that the term "bond" encompassed both Customs and Central Excise bonds. The Tribunal noted that the judgment from the High Court of Madras was delivered without convincing reasons from the Government of India, leading to the conclusion that the term "bond" includes Central Excise bond as well. The Tribunal agreed with the Revenue's reasoning that not qualifying the term "bond" by any specific words like "Excise" or "Customs" prevents evasion of duties. Therefore, duty was correctly charged at the time of reimportation. Relying on the decisions of the Delhi and Mumbai Benches of the Tribunal, the Appellate Tribunal upheld the decision denying duty-free clearance under Section 20 and dismissed the appeal.