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Cus - No legitimate exemption can be denied, merely becuase notification was not claimed at time of import: CESTAT

By TIOL News Service

MUMBAI, NOV 25, 2016: THE fact of the case is that the appellant exported 500 Kgs of Cinnazine to M/s Pharmatech, Switzerland and the same consignment was re-imported for reprocessing and re-export under Notification No. 158/95-Cus 14.11.1995.

The appellant was unable to re-export the consignment within stipulated time as they had already sold their bulk drug business. They requested for reassessment of the said consignment under alternate notification No. 94/96-Cus.

The AC rejected this request on the ground that at the time of export the appellant have claimed the exemption Notification No. 158/95-Cus. Moreover, a Bond and Bank Guarantee was executed and accepted by the department and the appellant was supposed to re-export the goods within six months. However, since the appellant could not re-export the goods within stipulated time period, the duty forgone was demanded.

As the Commissioner (Appeals) rejected their appeal, the appellant is before the CESTAT.

It is submitted that it is a settled law that alternate notification, even if claimed at later stage, the same should be allowed. In support, reliance is placed on the following judgments:

- Share Medical Care - 2007-TIOL-26-SC-CUS

- Srinar Electronics (P) Ltd. - 2010-TIOL-640-CESTAT-MAD

- Birla NGK Insulators Pvt. Ltd. - 2013-TIOL-1059-CESTAT-AHM-LB

The AR reiterated the findings of the impugned order and also adverted to the following decisions -

- R.R. Kobler Overseas P Ltd. - 2015-TIOL-2447-CESTAT-DEL

- Bharat Forge Ltd. - 2014-TIOL-2924-CESTAT-MUM

- Daffodils International (P) Ltd. - 2006-TIOL-86-CESTAT-DEL

The Bench observed -

++ If the importer fails to comply with the condition of the notification which was claimed at the time of import, the duty is required to be paid as per the rate applicable and as per any other notification, if available to the imported goods.

++ Only because the notification was not claimed at the time of import and claimed later on, the legitimate exemption, which otherwise available under the statute, cannot be denied. This issue has been settled in the various judgments (cited supra by appellant).

++ All those judgments (cited by AR) are on denial of exemption Notification No. 158/95-Cus for non-compliance of re-export condition, whereas in the present case the appellant is not seeking relief under the said notification, their claim is on alternate Notification No. 94/96-Cus which is covered by the Apex Court judgment of Share Medicals Care (supra). Hence all the judgments relied upon (by AR) stand distinguished.

Holding that the appellant is entitled for alternate exemption Notification No. 94/96-Cus subject to it's eligibility, the impugned order was set aside and the appeal was allowed.

In passing, remand: Perhaps, a ROM is on its way…

(See 2016-TIOL-3055-CESTAT-MUM)


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