2017 (2) TMI 424 - AT - Customs

Benefit of N/N. 94/96 dated 16.12.1996 - export of agarbattis by SSI unit, which came back due to defects - denial on the ground that as per of the conditions laid down under Sl.No. (1) (e) of the said notification, such benefit is not permissible to SSI units for the goods exported under DEEC Scheme - Held that - Every exemption being subjected to conditions prescribed by the notification, non-fulfilment thereof debars appellant to the notification benefit. Therefore, appellant is directed to plead before the ld. Commissioner (Appeals), as to the eligibility to the exemption under the notification and satisfy him on the compliance to the terms of notification both on substantial ground as well as on the limitation as per the proviso to the notification. - appeal allowed by way of remand.

Summary

Issues:
1. Interpretation of Customs Notification No. 94/96 regarding re-import of goods exported under duty exemption schemes.
2. Eligibility of SSI unit for exemption under the notification.
3. Requirement of fulfilling conditions for claiming exemption benefits.

Analysis:
1. The appellant, a SSI unit exporting Agarbattis, faced duty levied on re-imported goods due to defects found by the importer abroad. The dispute centered around the applicability of Customs Notification No. 94/96, specifically clause (e) related to goods exported under DEEC Scheme. The appellant contended fulfillment of conditions under the notification, emphasizing clause (e) in column 2 of the Table, and argued against the rejection of benefits by the adjudicating authority.

2. The Revenue disputed the appellant's eligibility for exemption, questioning whether the goods were exported under the DEEC scheme and the appellant's manufacturer status. It was emphasized that mere pleading of SSI status does not automatically grant relief; compliance with conditions, especially clause (iv) corresponding to clause (e) in the notification, is essential. The Revenue sought dismissal of the appeals based on lack of evidence regarding fulfillment of conditions.

3. After hearing both sides and reviewing the records, the Tribunal found insufficient evidence to determine if the conditions specified in the notification were met by the appellant. Emphasizing that exemptions are subject to prescribed conditions, the Tribunal directed the appellant to present evidence of eligibility for the exemption before the Commissioner (Appeals) and demonstrate compliance with the notification's terms. The Tribunal highlighted the importance of a fair hearing and instructed the adjudicating authority to reconsider the matter within three months.

4. Considering the significance of the exemption claim and the potential impact on justice, the Tribunal remanded both appeals to the adjudicating authority for a fresh decision. The need for a thorough review of the eligibility criteria and compliance with the notification's provisions was underscored, indicating the complexity of the case despite the relatively small financial demand. The appeals were allowed for remand, emphasizing the importance of a detailed examination of the exemption claim.

In conclusion, the judgment delves into the intricate details of interpreting Customs Notification No. 94/96, highlighting the necessity of fulfilling specified conditions for claiming exemption benefits under the notification. The case underscores the importance of providing evidence to support eligibility for exemptions and complying with the terms outlined in such notifications to avail of favorable treatment in customs matters.