2017 (9) TMI 931 - AT - Customs

Forfeiture of Bank Guarantee at the time of re-import - failure to seek extension of time - whether the appellant has complied with the condition of N/N. 158/95 or not? - Held that - in the notification, nowhere it is mentioned that the appellant is required to seek extension of time within six months from the date of re-importation. In fact, the fact is not in dispute that re-imported goods are required to be reexported within three years of re-import as per condition (i) of the said notification. When the main condition of notification has not been violated by the appellant, therefore the benefit of notification cannot be denied merely on the ground that appellant did not seek extension of time within 6 months of re-import - appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Appropriation of bank guarantee for re-importation of goods not re-exported within 6 months as per notification No.158/95.
2. Compliance with the conditions of notification No.158/95.
3. Consideration of extension of time for re-exportation within the specified period.

Analysis:
1. The appellant appealed against the impugned order where the bank guarantee was forfeited for not re-exporting goods within 6 months as required by notification No.158/95. The appellant re-imported defective goods but failed to re-export them within the stipulated time frame, resulting in the bank guarantee being appropriated. The appellant argued that they re-exported the goods within 9 months and should not have to forfeit the bank guarantee as they substantially complied with the notification's conditions.

2. The appellant contended that in a previous round of litigation, the matter was remanded for reconsideration of the notification's conditions and their request for an extension of time. The appellant believed they had complied with the notification by re-exporting the goods within three years of re-importation, even though they did not seek prior permission for an extension within the initial 6 months. The appellant argued that the requirement for seeking an extension within 6 months was not explicitly stated in the notification, and therefore, they should not lose the bank guarantee.

3. The Tribunal analyzed the conditions of notification No.158/95, which required re-imported goods to be re-exported within six months or with an extension granted by the Commissioner of Customs. The Tribunal noted that the appellant did not violate the main condition of re-exporting within three years of re-importation. The Tribunal distinguished the present case from a previous judgment where no extension was claimed, emphasizing that in this case, the appellant did apply for an extension after the initial 6 months had passed. As the appellant had substantially complied with the notification's conditions, the Tribunal held that the bank guarantee should not be forfeited. Consequently, the impugned order was set aside, and the appeal was allowed with consequential relief.