2024 (2) TMI 1320 - AT - Customs

Denial the benefit of the exemption notification no. 45/2017-Cus and 46/2017-Cus - Re-importation of the goods - The appellant exported goods to Thailand but faced rejection due to quality issues - switch over to the benefit of another Notification No. 158/95-Cus - more than one Notifications are applicable for the goods - demand of duty - penalty - conditions required to be fulfilled of the same notification - HELD THAT - It is settled law that where more than one Notifications are applicable for the goods or to the concerned transactions attracting levy of any duty or tax it is the choice and the option of the citizen/assessee to claim benefit of a Notification that suits him; and it is also permissible to the citizen/assessee to claim benefit of any Notification at a later stage notwithstanding the fact that the citizen/assessee claimed benefit of another Notification at the initial stage. It is evident that to be eligible for the benefit under Notification No. 158/95 the importation should take place within three years from the date of original exportation goods are re-exported within a maximum of twelve months from the date of re importation and when such re-exportation is not effected as per the conditions of the notification the differential duty liability on account of availment of Notification No 158/95- Cus. at re-importation is liable to paid up by the importer. There is no ambiguity whatsoever in the Notification issued by the Central Government. The Notification stipulates to export the goods after repairs or reconditioning within the period as stipulated and pay on demand in the event of his failure to comply with any of the aforesaid conditions an amount equal to the difference between the duty levied at the time of re-import and the duty leviable on such goods at the time of importation but for the exemption contained therein. We have considered the contours of the decision of M/s. Indian Rayon and Industries 2008 (7) TMI 401 - SUPREME COURT which while dealing with the Notification No. 158/95-Cus held that once the benefit of Notification No. 158/95-Cus is taken the conditions are required to be fulfilled of the same notification. However it is also noted that Notification No. 158/95-Cus was the only notification available at the time of re-import for most of the period. We therefore direct the learned Commissioner may consider the benefit of Notification No. 45/2017-Cus and 46/2017-Cus for the period when they were available and if otherwise applicable. We also find that breach of notification 158/95-Cus under which re-import was done was committed. The interest and penal consequences therefore have to follow. However if another beneficial notification to the appellant was available and they are eligible for the same then as far as duty is concerned they can legitimately take the benefit of the same. Any other beneficial notification can be claimed at any stage by the party. With these directions we remand the matter for re-consideration by the adjudicating authority in terms of above principles.

Summary

Issues Involved:
1. Denial of benefit under exemption notifications.
2. Jurisdictional error by the Principal Commissioner.
3. Applicability of alternative exemption notifications.
4. Imposition of penalty.

Summary:

1. Denial of Benefit under Exemption Notifications:
The appellant was denied the benefit of exemption notifications No. 45/2017-Cus and 46/2017-Cus on the grounds that they had already availed the benefit of Notification No. 158/95-Cus during the re-import of goods. The goods were initially exported to Thailand but were rejected and re-imported. The appellant argued that they inadvertently mentioned Notification No. 158/95-Cus and should be allowed to switch to the more beneficial notifications No. 45/2017-Cus and 46/2017-Cus.

2. Jurisdictional Error by the Principal Commissioner:
The appellant contended that the Principal Commissioner committed a grave jurisdictional error by denying the benefit of the notifications No. 45/2017-Cus and 46/2017-Cus solely because the appellant had initially claimed the benefit of Notification No. 158/95-Cus. The appellant relied on settled legal principles that allow the choice of the most beneficial notification, even at a later stage.

3. Applicability of Alternative Exemption Notifications:
The adjudicating authority rejected the appellant's claim by referring to the decision in Indian Rayon & Industries, which was deemed not applicable to the present case. The appellant argued that they had claimed the benefit of Notification No. 45/2017-Cus in the Bills of Entry and submitted a "No Incentive Certificate" from the Joint DGFT, establishing that they had not claimed export incentives. The appellant emphasized that the conditions of Notification No. 45/2017-Cus were fulfilled, and thus, the benefit should not be denied.

4. Imposition of Penalty:
The appellant argued that the imposition of penalty under Section 117 of the Customs Act was unjustified as there was no contravention of any provisions of the Act. The department, however, maintained that the conditions of Notification No. 158/95-Cus were clear and unambiguous, and failure to comply necessitated the payment of the duty forgone.

Conclusion:
The Tribunal noted that the decision in Olam Agro India vs. CC Ahmedabad, which allowed the benefit of an alternative notification, was not available to the adjudicating authority at the time of the original order. The Tribunal directed the adjudicating authority to reconsider the applicability of Notifications No. 45/2017-Cus and 46/2017-Cus for the relevant period and to allow the benefit if applicable. The Tribunal also upheld the breach of Notification No. 158/95-Cus, necessitating interest and penal consequences, but allowed the appellant to claim any other beneficial notification at any stage.

Remand:
The matter was remanded for reconsideration by the adjudicating authority in light of the Tribunal's directions.