2016 (2) TMI 137 - AT - Customs

Re-import of export goods for repair - failure to export within 6 months - exemption from Customs duty in terms of notification No. 158/95 Cus - 100% EOU - Held that - As EOU the appellant is eligible for duty free import which includes goods re-imported within three years from the date of exportation for repair or reconditioning. They have a general B 17 Bond for binding themselves for due exportations of goods. While it is necessary for appellant to claim a particular exemption notification and to follow the conditionalities, in the present case, we find that the impugned re-import will fall even in the general duty-free import allowed for EOU under notification No. 52/2003. Admittedly, all the conditions for such exemption have been satisfied by the appellant. Considering the facts of the present case, we find that appellant cannot be denied such exemption only on the ground that they claimed and followed another exemption notification. Demand of customs duty in the present case is not sustainable - Decided in favor of assessee.

Summary

Issues involved:
1. Claim of exemption from Customs duty under different notifications.
2. Failure to re-export goods within stipulated time frame.
3. Applicability of specific exemption notification for Export Oriented Units (EOUs).
4. Interpretation of conditions for duty-free import under various notifications.
5. Legal implications of opting for a particular exemption notification.

Analysis:

1. The case involved the appellant, an Export Oriented Unit (EOU), who re-imported defective goods for repair but failed to re-export them within the required time frame, leading to a demand for Customs duty amounting to Rs. 24,20,800. The appellant claimed exemption under notification No. 158/95 Cus dated 14.11.1995, while the Commissioner contended that they should have opted for notification No. 52/2003 Cus dated 31.3.2003. The appellant argued that they fulfilled all conditions under the chosen notification and cited a Supreme Court ruling allowing the claim of benefits under a different notification at a later stage.

2. The appellant's failure to re-export the goods within six months as per the conditions of the chosen notification led to the demand for Customs duty. The Commissioner insisted that the appellant must adhere to the conditions of the selected exemption notification at the time of re-import. The appellant's subsequent attempt to claim benefits under a different notification after several years was contested by the department, emphasizing the importance of timely compliance with chosen exemptions.

3. Upon examination, the Tribunal found that the appellant, as an EOU, was entitled to duty-free import for goods re-imported within three years for repair or reconditioning under notification No. 52/2003. Despite initially opting for a different notification, the Tribunal concluded that the appellant met all conditions for duty-free import under the applicable notification. The Tribunal highlighted the relevance of the Supreme Court's decision in Share Medical Care case, allowing the appellant to claim benefits under the appropriate notification, considering the re-exportation of the goods.

4. The Tribunal determined that the demand for Customs duty was unsustainable in the present case, given the appellant's eligibility for exemption under notification No. 52/2003 and the fulfillment of all conditions for duty-free import. The decision emphasized that the appellant could not be denied exemption solely based on opting for a different notification initially. The ruling provided consequential benefits to the appellant in light of the findings.

In conclusion, the judgment favored the appellant, recognizing their entitlement to exemption under the relevant notification despite initially choosing a different exemption route. The decision underscored the importance of fulfilling conditions for duty-free import and upheld the appellant's right to claim benefits under the appropriate notification, ensuring a fair outcome in the case.