TMI Blog2017 (11) TMI 1529X X X X Extracts X X X X X X X X Extracts X X X X ..... acilitating provisions by way of retention of goods in India, the notification also requires that after reconditioning/repair, the re-import goods shall have to be re-exported within a maximum period of 12 months from the date of such re-import. These time limits prescribed both, for re-importation as well as the re-exportation, in our view, are substantive conditionalities and not merely procedural. It is also not the case that when being required to pay duty forgone in the event of non-compliance of Notification No.158/95-Cus., the importer is left high and dry with no other remedy. Indeed, such importer, even if he has to discharge differential duty liability, provided he eventually re-exports the re-imported goods at some point, will surely be eligible to claim drawback towards the duties suffered on the goods exported - once the substantive post-importation condition of Notification No.158/95-Cus. is not satisfied or complied with, the importer will have no other option but to pay an amount equal to the difference between 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 in Notification No. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... imported the goods vide Bill of Entry No.58297 dt. 13.10.98 for reprocessing/reconditioning, claiming Notification No.158/95-Cus. As the subject goods could not be re-exported within the period of six months prescribed in the said notification, they sought extension for re-export, which was permitted by the concerned Deputy Commissioner of Customs upto 21.06.2000. Subsequently, the appellant re-exported the goods after conducting necessary repairs but beyond the period prescribed in the notification. A SCN dt. 2.3.2000 was therefore issued to the importer, inter alia proposing duty demand of ₹ 32,78,560/-. In adjudication, original authority vide an order dt. 11.09.2001 confirmed the proposed demand with interest. In appeal, before Commissioner (Appeals), appellant sought for benefit of another Customs Notification No.94/96-Cus. The Commissioner (Appeals), while upholding lower authority's order with regard to denial of benefit of Notification No.158/95-Cus., however permitted the appellant to approach lower authority with a claim for benefit of Notification No.94/96 on merits. In de novo consideration, lower authority vide order dt. 28.03.2005 denied the benefit of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lant, had re-imported automatic slack adjustors, returned by buyers for rectification, claiming benefit of Notification No.158/95-Cus. As they could not re-export the goods within the stipulated time, department issued a demand of ₹ 16,60,218/-, however appellants requested for reassessment of Bills of Entry under Customs Notification 94/96-Cus. instead of 158/95-Cus. and also sought reassessment of the notional freight paid by them and to change it with actual freight figures. Original authority held that change of notification cannot be permitted and also rejected the request for reassessment. Duty of ₹ 14,10,320/- was confirmed by original authority. On appeal, Commissioner (Appeals) vide impugned order dt.03.11.2006, upheld the order of original authority. Hence Appeal No.C/60/2007. 6. None appeared for appellant Cylinder Liners Agencies (P) Ltd. in Appeal C/231/2006. The ld. advocates appearing for other appeals having made arguments more or less on the same lines, they are broadly summarized as under : i) Duty cannot be levied and collected on goods which have been ultimately re-exported and are no longer part of the Indian landmass. Therefore, even thou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion. Once that is done, the matter gets re-opened and proper quantification of duty has to be again made. Therefore, the point for determination in the case of Priya Blue Industries before the Apex Court was totally different and in the present case, this is a different situation and not covered by the decision of the Supreme Court in the above case. 7. On the other hand, on behalf of Revenue, ld. A.Rs Shri A.Cletus, ADC and Shri B. Balamurugan support the impugned orders. They also made oral submissions which can be broadly summarized as follows : (i) Goods have been imported claiming only Notification No.158/95-Cus. Although appellant have now claimed alternate Notification No.94/96-Cus, that is applicable when originally exported Indian goods are returned/rejected by foreign buyers, subject to a vital that DEEC book should not have been closed and accordingly on re-exportation, the re-imports shall have to be delogged from the DEEC book. However, in these cases, DEEC book had already been closed and hence it was no longer possible to delog the DEEC book. (ii) When appellants have voluntarily opted for following a special procedure extended under Notificat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m the date of exportation; 2. Goods are re-exported within six months of the date of reimportation or such extended period not exceeding a further period of six months as the Commissioner of Customs may allow; 3. The Assistant Commissioner of Customs is satisfied as regards identity of the goods; 4. The importers at the time of importation executes a bond undertaking to-(a) export the goods after repairs or reconditioning within the period as stipulated; (b) 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 reimport and the duty leviable on such goods at the time of importation but for the exemption contained herein. From the above, what emerges is 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.15 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat of a substantive condition is not, since it would otherwise facilitate commission of fraud and introduce administrative conveniences. The relevant portion of this judgment of Hon ble Apex Court is reproduced below makes for illuminating reading : 11 . ..........The consequence which Shri Narasimhamurthy suggests should flow from the non-compliance would, indeed, be the result if the condition was a substantive one and one fundamental to the policy underlying the exemption. Its stringency and mandatory nature must be justified by the purpose intended to be served. The mere fact that it is statutory does not matter one way or the other. There are conditions and conditions. Some may be substantive, mandatory and based on considerations of policy and some others may merely belong to the area of procedure. It will be erroneous to attach equal importance to the non-observance of all conditions irrespective of the purposes they were intended to serve. In Kedarnath s case itself this Court pointed out that the stringency of the provisions and the mandatory character imparted to them were matters of important policy. The Court observed : .....The object of S. 5(2)(a)(ii) o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on of the said Notification No.94/96-Cus as under : Exemption to re-import of goods exported under duty drawback rebate of duty or under bond. - In exercise of the powers conferred by sub-section (1) of section 25 of the Customs Act, 1962 (52 of 1962) and in supersession of the notification of the Government of India in the Ministry of Finance, (Department of Revenue), No.97/95-Customs, dated the 26th May, 1995 the Central Government, being satisfied that it is necessary in the public interest so to do, hereby exempts the goods falling within any Chapter of the First Schedule to the Customs Tariff Act, 1975 (51 of 1975) and specified in column (2) of the Table hereto annexed (hereinafter referred to as the said Table) when reimported into India, from so much of the duty of custom s leviable thereon which is specified in the said First Schedule, the additional duty leviable thereon under section 3 of the said Customs Tariff Act and special duty of customs leviable under sub-section (1) of section 68 of the Finance (No.2) Act, 1996 (33 of 1996), as is in excess of the amount indicated in the corresponding entry in column (3) of the said Table. TABLE ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... her such costs are actually incurred or not), insurance and freight charges, both ways. 2A Goods exported under Duty Entitlement Passbook (DEPB) Scheme. Amount of Central Excise duty leviable at the time and place of importation of goods plus amount of drawback of Excise duties allowed at the time of exports, subject to the condition that the importer produces a Duty Entitlement Passbook before the proper officer of Customs for debit of an amount equal to the amount of Duty Entitlement Passbook Scheme (DEPB) credit which was permitted by the Government of India in the Ministry of Commerce for the products exported at the time of export of the consignment which is being reimported. 3. Goods other than those falling under SI.Nos. 1and 2 Nil Provided that the Assistant Commissioner of Customs is satisfied that- (a) the goods [other than the goods exported under the Duty Exemption Scheme (DEEC) or the Export Promotion Capital Goods Scheme (EPCG) or Duty Entitlement Passbook Scheme (DEPB)] are re-imported within three years after their exportatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ect of goods exported under claim for rebate of Central Excise duty, the importer will, at the time of their re-importation, have to discharge Customs Duty equal to amount of such rebate availed at the time of export. In respect of goods exported under bond without payment of excise duty, re-importation will be allowed on payment of duty equal to the amount of Central Excise duty not paid. In respect of goods exported under DEEC scheme, at the time of re-importation, the DEEC book should not have been finalized/closed and export in question is delogged from DEEC book. In respect of goods exported under EPCG scheme, the period of full export performance should not have expired and necessary endorsements regarding re-import are required to be made. In respect of goods exported under DEPB scheme, the duty that has to be discharged at the time of re-import is equal to amount of Central Excise duty leviable at the time and place of importation plus amount of drawback of Excise Duty allowed at the time of exports subject to certain conditions. 16. However, one crucial takeaway from Notification No.94/96-Cus is that it is only an exemption notification to facilitate re-import, h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -Cus. and Notification No.94/96-Cus., we are unable to find much merit in this contention. Both these notifications have been issued for different situations and different reasons. Notification No.94/96 does not require that the re-importation is for the purposes of repair or reconditioning. There is also no requirement in that notification mandating re-export of the goods of the re-imported goods. In other words, Notification No.94/96-Cus. seeks to cover only those situations where the importer does not have any declared intent to immediately re-export the re-imported goods, as long as the duty liability specified in Col.3 of that notification is discharged. The importer can leave the goods undisturbed e.g., in their factory or premises, without any pressing need for their re-export. That however is not the case with Notification No.158/95-Cus which seeks to cover a situation where the goods are re-imported within 3 years, only for repair or reconditioning and proximate re-export thereafter. Precisely for this reason, the importer enjoys full exemption from customs duty at the time of their re-importation. We are therefore not able to fathom how an import governed by condit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of notification, an amount equal to the difference between the duty levied and leviable on such goods. In respect of each of the Bills of Entry, separate bonds were executed indicating Bill of Entry No., description of goods, country of origin, CIF Value, the assessable value and the bond value. 12. The Revenue contends that the assessee could not avail the benefit under Notification No. 94/96-Cus. and that it could not change its option. According to the assessee, the assessee could change its option even at a later stage and it could avail of the benefit under Notification No. 94/96-Cus. which was in force at that time. 13. We do not find any substance in this submission advanced on behalf of the assessee. The only notification which was available to the assessee at the time of import which granted the assessee the right to import duty free goods was Notification No. 158/95-Cus. Having availed of the benefit of notification, the assessee has necessarily to comply with the conditions of the notification. It goes without saying that the assessee cannot approbate and reprobate. In Tractors and Farm Equipment Ltd. v. Collector of Customs, Madras, 1997 (91) E.L.T. 254 (S.C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (IV) The Manufacture exporters who are registered with Central Excise Department may be permitted clearance of such goods without payment of Central Excise duty under transit bond to be executed with the customs authorities, such bond will be cancelled on the production of certificate issued by Central Excise authorities about receipt of re-imported goods into their factory. (2) xxx xxx (3) xxx xxx refers to the goods exported under DEEC or Export Promotion Capital Goods (EPCG) Scheme and not under DEPB Scheme. In the present case, out of the three Bills of Entry covering goods which had to be re-exported, only one of them was for goods earlier exported under DEEC scheme while the other two were under DEPB scheme. The adjudicating authority had, in respect of goods initially imported under DEEC Scheme, given the benefit of the Notification No. 94/96-Cus, while rejecting the claim in respect of the goods exported under a DEPB Scheme. This is in accordance with the language of Notification No. 94/96-Cus. The difference betwe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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