Case Law Details
AVT McCormick Ingredients Pvt. Ltd. Vs Commissioner of Customs (CESTAT Bangalore)
CESTAT Bangalore held that benefit of notification 52/2003-Cus. dated 31.03.2003 admissible on reimport, re-processing and re-export of ‘Coarse Ground Chilli’ which has been rejected by the foreign buyer.
Facts- The appellant had filed a Bill of Entry dated 21.11.2023 for reimport of 6000 kg. ‘Coarse Ground Chilli’ which was originally exported against Shipping Bill dated 31.10.2022. The initial export consignment was of 25,000 Kg. against the said Shipping Bill which owing variation in granulation (particle size), the foreign buyer rejected the quantity of 6000 Kgs.
As per the appellant, the re-imported goods will be reprocessed and will be re-exported in accordance with Notification No. 52/2003-Cus. dated 31.03.2003. Assistant Commissioner, however, rejected the benefit of the Notification No.52/2003-Cus. dated 31.03.2003. Commissioner (Appeals) upheld the order of the adjudicating authority. Being aggrieved, the present appeal is filed.
Conclusion- Sr. No.15 of the Annexure-I to Notification No. 52/2003- Cuss. dated 31.03.2003, on the other hand, allows re-import of goods within one year from the date of exportation, in the event, foreign buyer fails to take delivery and the explanation appended thereto, includes rejection of the goods by the foreign buyer. In the event of rejection of goods or failure to take delivery of the goods exported, the same could be re-imported without any condition of re-export of the same like the Sr. No.14.
Held that we do not see any merit in the impugned order of the authorities below observing that the goods rejected by the foreign buyer would invariably fall under Sr. No.15 of Annexure-I even though the appellant specifically advanced a request for repair or reconditioning for the purpose of re-export, as permitted to the type of goods (other than goods specified in Annexure VII) under Sr. No.14. Thus the benefit of Notification 52/2003 Cuss. dated 3 1.03.2003 (Sr. No.14(i) of Annexure-I) is admissible on the reimported goods.
FULL TEXT OF THE CESTAT BANGALORE ORDER
This is an appeal filed against Order-in-Appeal No.COCCUSTM-APP-151/2023-24 dated 26.03.2024 passed by the Commissioner of Customs (Appeals).
2. Briefly stated the facts of the case are that the appellant had filed a Bill of Entry No.8862322 dated 21.11.2023 for reimport of 6000 kg. ‘Coarse Ground Chilli’ which was originally exported against Shipping Bill No.5144263 dated 31.10.2022.
The initial export consignment was of 25,000 Kg. against the said Shipping Bill which owing variation in granulation (particle size), the foreign buyer rejected the quantity of 6000 Kgs. This fact had been intimated by the appellant through their letter dated 16.11.2023 to the department; also it is intimated that the said re-imported goods will be reprocessed and will be reexported in accordance with Notification No. 52/2003-Cus. dated 31.03.2003. The learned Assistant Commissioner, however, rejected the benefit of the Notification No.52/2003-Cus. dated 31.03.2003 and observed that it would attract merit assessment with appropriate duty. Aggrieved by the said order, they filed an appeal before the learned Commissioner (Appeals), who upheld the order of the adjudicating authority and rejected their appeal. Hence, the present appeal.
3. At the outset, the learned advocate for the appellant has submitted that the description of entries at No.14 of the exemption Notification No. 52/2003-Cus. dated 31.03.2003 is clear and unambiguous. It lays down that the goods could be reimported within three years from the date of exportation for repair or reconditioning of the goods other than goods specified in Annexure-VII; goods falling under Annexure VII could be reimported within seven years from the date of exportation for repair or reconditioning. The proviso specifies that re-imported goods after carrying out the process of repair or reconditioning be re-exported within one year from the date of re-importation. It is his contention that even though the goods are returned/rejected by the overseas buyers as the same did not match to the particle size, the same could be re-imported for repair or reconditioning as per Sr. No.14 of Annexure-I of the said Notification. He has submitted that the said Notification does not in any manner distinguish between the types of goods which could be re-imported for repair or reconditioning; if such an interpretation limiting its scope thereof if adopted to particular types of goods, then it would be artificial and at the cost of violence to the scheme, spirit, intent and purport of the Notification. He has submitted that since the goods are reimported for the purpose of reprocessing in order to re-export and in view of the principle laid down in various judgments the benefit of the said Notification is admissible, therefore, the impugned order is bad in law and cannot be sustained. He has submitted that at the time of import itself, the appellant made their intention clear that the goods were re-imported for the purpose of repair or reconditioning and re-export. Further, he has submitted that recently i.e., on 12.09.2024 they have obtained an Analytical Report on the impugned goods from an authorised analytical laboratory viz., Eureka Analytical Services Pvt. Ltd. where the goods in question are after analysis opined to be fit for human consumption; therefore, the appellant be allowed to clear the goods as per Notification No. 52/2003-Cus. dated 31.03.2003 (Sr. No.14(i) of Annexure-I).
4. Learned Authorised Representative for the Revenue reiterated the findings of the learned Commissioner (Appeals). He has submitted that since a part of consignment i.e., 6000 of the materials were rejected by the overseas buyer, their case is squarely fall under category of Sr. No.15 of Annexure-I of the Notification No. 52/2003-Cus. dated 31.03.2003. Since the goods were re-imported after one year from the date of export, therefore, the benefit of the said Notification has rightly been rejected by the authorities below.
5. Heard both sides and perused the records. The short issue involved in the present appeal for consideration is, whether the appellants are entitled to the benefit of Notification No. 52/2003- dated 31.03.2003 (Sr. No.14(i) of Annexure-I) on the reimported 6000 Kegs. ‘Coarse Ground Chilly’.
6. Undisputedly, the appellant had initially exported 25,000 kg. of ‘Coarse Ground Chili’ on 31.10.2022 against Shipping Bill No.5144263. They had re-imported 6000 kgs. and filed Bill of Entry No.8862322 dated 21.11.2023 claiming benefit of Notification No.52/2003 Cus. dated 31.03.2003. Through their letter dated 16.11.2023, informed the department that due to variation in the granulation, specification of a part of the total consignment i.e., 6000 kgs. was rejected by the foreign buyer, which they intend to repair or reconditioning and re-export as per the condition of the Notification No. 52/2003-Cus. dated 31.03.2003 (Sr. No.14(i) of Annexure-I). The department on the other hand was of the view that since said part consignment had been rejected which accordingly would fall under Sr. No.15 of Annexure-I of Notification No. 52/2003-Cus. dated 31.03.2003 and re-import was made after one year of the initial export, hence, the benefit of the said Notification not admissible.
7. To examine the rival contention, it is necessary to reproduce the relevant portion of Notification No.52/2003-Cus. dated 31.03.2003 i.e., Sr. No.14 and 15 to Annexure-I which is as below:
| Sr. No. | Description of Goods |
| 14 | (i) Goods re-imported (other than specified in Annexure-VII to this notification) within three years from the date of exportation, for repair or reconditioning.
(ii) Goods re-imported, as specified in Annexure-VII to this notification, within seven years from the date of exportation, for repair or reconditioning. Provided that such re-imported goods mentioned at (i) and (ii) above are re-exported within one year of the date of re-importation. |
| 15 | Goods re-imported within one year from the date of exportation from the unit due to failure of the foreign buyer to take delivery. |
8. A plain reading of Sr. No. 14 of the said Notification, it is clear that there are two classes of goods which have been allowed to be re-imported for the purpose of repair or reconditioning viz.(i) Goods specified in Annexure-VII, the period of limitation for re-importation is within seven years from the date of exportation, and(ii) the goods other than specified in Annexure-VII is within three years from the date of exportation. The re-importation was allowed for the purpose of repair or reconditioning. A proviso appended to the said Sr. No. 14 stipulates that in case of both the re-imports, it is necessary to be re-exported within one year from the date of re-importation. No other condition has been specified under the said entry so as to make the exported goods to be eligible for re-import with an object to repair or reconditioning and thereafter, re-export within a period of one year.
9. Sr. No.15 of the Annexure-I to Notification No. 52/2003- Cuss. dated 31.03.2003, on the other hand, allows re-import of goods within one year from the date of exportation, in the event, foreign buyer fails to take delivery and the explanation appended thereto, includes rejection of the goods by the foreign buyer. In the event of rejection of goods or failure to take delivery of the goods exported, the same could be re-imported without any condition of re-export of the same like the Sr. No.14. Thus, the difference between the entry at Sr. No.14 and 15 is that in the former case, the goods could be re-imported for repair or reconditioning, irrespective of whether the overseas buyer rejects or fail to take delivery; the re-import could be within three years or seven years as the case may from the date of import, and also time limit is prescribed for re-export after the process of repair or reconditioning; whereas, under Sr. No.15, the goods could be re-imported if the same is rejected or not accepted by the buyer; within a period of one year from the date of export. It could be cleared to Domestic Tariff Are (DTA), if permissible under law but there is condition for re-export of the same. Thus, Sr. No.14 and 15 can be applied to the re-imported goods depending on the purpose and circumstances for which different time period prescribed under each of the said entry. Further, it is significant to note that there are two classes of goods prescribed under Sr. No. 14 ; (i) goods that are mentioned under Annexure-VII and (ii) goods falling outside the scope of Annexure-VII, for the purpose of applying the period of limitation to re-imported goods. In these circumstances, we do not see any merit in the impugned order of the authorities below observing that the goods rejected by the foreign buyer would invariably fall under Sr. No.15 of Annexure-I even though the appellant specifically advanced a request for repair or reconditioning for the purpose of re-export, as permitted to the type of goods (other than goods specified in Annexure VII) under Sr. No.14. Thus the benefit of Notification 52/2003 Cuss. dated 3 1.03.2003 (Sr. No.14(i) of Annexure-I) is admissible on the reimported goods.
10. In the result, the impugned order is set aside and the appeal is allowed with consequential relief, if any, as per law.
(Order pronounced in Open Court on 25.10.2024.)
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