Exporters could claim benefit under Notification at later stage even if not initially availed in case of Reimported Goods

SSK Export Ltd Vs Commissioner of Customs (CESTAT Bangalore)

Conclusion: Where goods had been duly exported after proper declaration in the shipping bills, there was no justification in demanding duty from assessee on the goods re-exported. Even if an applicant did not claim benefit under a particular notification at initial stage, he was not debarred, prohibited or estopped from claiming such benefit at a later stage.

Held: Assessee-company had exported 20592 kg of South India BP1 Tea to the Netherlands under the Post-DEPB Scheme in 2004. The foreign buyer rejected the consignment due to discrepancies in blending. The cargo was reimported into India in 2005 under Notification No.158/95 for re-export after correction and reprocessing. The goods were re-exported in April 2005 after Customs clearance. Customs authorities issued a show-cause notice alleging non compliance with Notification No.158/95 and demanded duties and interest. On appeal, CIT (Appeals) upheld the decision of the adjudicating authority. Aggrieved, assessee appealed before the CESTAT arguing that the returned goods were identified and re-exported after Customs inspection and Notification No.158/95 was satisfied. Assessee argued that the exemption under Notification No.94/96 should apply as no Duty Entitlement Passbook (DEPB) scheme benefits were claimed. It submitted the bond executed at reimport proving the identity of the goods. It was held Supreme court in the case of Share Medical Care Vs. UOI [2007(209) ELT 321 (SC)] that even if an applicant did not claim benefit under a particular notification at initial stage, he was not debarred, prohibited or estopped from claiming such benefit at a later stage. The goods had been duly exported after proper declaration in the shipping bills, there was no justification in demanding duty from assessee on the goods re-exported.

FULL TEXT OF THE CESTAT BANGALORE ORDER

This is an appeal filed against Order-in-Appeal No.COC-CUSTM-000-APP-20-2015-16 dated 22.05.2015 passed by the Commissioner of Customs (Appeals), Cochin.

2. Briefly stated the facts of the case are that the appellant had exported 396 packages containing 20592 kgs of South India BP1 Tea STD 156 to M/s. Van Rees B.V., Netherland against Ex-bond shipping Bill No.1257224 dated 29.07.2004 under Post-DEPB Scheme. Since the goods were not accepted by the foreign buyer due to discrepancy in the blending, the appellant had to recall the cargo back to India; therefore they did not claim any DEPB benefit. The goods were reimported for blending and correction against Bill of Entry No.156633 dated 17.03.2005 for re-export claiming benefit of Notification No.158/95 dated 14.11.1995. The said goods were cleared duty free, in terms of Notification No.158/95-Cust dated 14.11.1995 on execution of re-export bond with Customs. After reprocessing of the goods, they reexported the same against two shipping bills Nos.1303036 dated 20.04.2005 and 1303256 dated 23.04.2005. They were issued with show-cause noticed alleging non­compliance with the condition of Notification No.158/95-Cus dated 14.11.1995 proposing to recovery duty of Rs.12,71,779/-with applicable interest. On adjudication, the demand was confirmed with interest. Aggrieved by the said order, they filed appeal before the learned Commissioner(Appeals) who in turn rejected their appeal. hence, the present appeal.

3. At the outset, the learned advocate for the appellant has submitted that they have initially exported a total quantity of 20592 kgs of India Tea against one shipping bill No.1257224. In the said shipping bill, the appellant mentioned claim of post-DEPB Scheme. Since the foreign buyer did not accept the consignment due to defects, the appellant recalled the entire consignment back to India and filed Bill of Entry No.156633 dated 17.03.2005 claiming benefit of Notification No.158/95. They have processed the goods and later re-exported against two shipping bills dated 20.04.2005 and 23.04.2005. since the goods were returned by the foreign buyer and to be reprocessed, they did not claim DEPB benefit. He has submitted that in terms of the bond executed at the time of reimport, they were asked to prove before the Customs authority at the time of export for identification that the goods imported under Bills of Entry mentioned in the bond has been exported. The Customs authorities duly verified the goods returned which were part of the export cargo and after being satisfied on inspection of the goods that goods exported were part of the returned cargo, allowed export of the said goods. In both the shipping bills which were for 22880 kgs. each returned cargo used were 10450 kgs. in each shipping bill which was specifically mentioned in the invoice and packing list and export related documents. He has submitted that the appellant had completed and fulfilled their export obligation in exporting the goods after re-processing. He has submitted that the goods were returned and exported by them for the parties were governed by Notification No.94/96, there was no duty on the import of the goods; thus execution of bond under Notification No.158/95 was uncalled for. In terms of the requirement of the bond, the appellant produced the goods before the proper officer of the Customs and maintained the account and used the same; therefore, there was no violation of Notification No.158/95. Further he has submitted that alternatively even though, there could be a breach of Notification No.158/95, the liability to discharge duty of the imported goods would be governed by the Notification No.94/96; hence the confirmation of the demand by the authorities below is erroneous. He has submitted that the import of the goods earlier exported did not attract any duty since it is covered by Notification No.94/96. In support, they have referred to the following judgments:

a. Rallis India Ltd. Vs. CC(Import), Mumbai [2017(358) ELT 285 (Tri. Mum.)]

b. Reliance Precitone Jewellers Vs. CC, New Delhi [2013(297) ELT 71 (Tri. Del.)]

c. Ranbaxy Laboratory Ltd. Vs. CC, New Delhi [2014(304) ELT 407 (Tri. Del.)]

d. CC, Calcutta Vs. Indian Rayon & Industries Ltd. [2008(229) ELT 3 (SC)]

4. Learned AR for the Revenue has reiterated the findings of the learned Commissioner(Appeals).

5. Heard both sides and perused the records.

6. Undisputedly the appellant had initially exported a total of 20592 kgs. of Indian tea to Netherlands on 29.07.2004 against Shipping Bill No.1257224. Also it is not in dispute that on rejection of the same, the cargo was recalled to India on which no DEPB claim was advanced even though mentioned in the shipping bill dated 29.07.2004. The said goods were imported against Bill of Entry dated 17.03.2005 for re-export claiming benefit of Notification No.158/95 dated 14.11.1995. It is also not in dispute that after processing the goods, the same were re-exported within the prescribed period of limitation under Notification No.158/95 dated 14.11.1995 against shipping bills dated 20.04.2005 and 23.04.2005. Also, in each of the shipping bills, against which re-export was done, the appellant had specifically mentioned as “Returned cargo Used-10452 kgs (cleared vide B/E No.156633 dt. 17.03.2005)”. The goods have been exported after due verification by the Customs authorities. In these factual scenarios, allegation that the appellant had not followed the procedure in identifying goods at the time of export nor produced relevant certificate of reprocessing from the authorities, in our view, would not be sustainable. Besides, we find that the appellant are also entitled to the benefit of Notification No.94/96-Cus dated 16.12.1996.

7. It is held by the Hon’ble Supreme court in the case of Share Medical Care Vs. UOI [2007(209) ELT 321 (SC)] that even if an applicant does not claim benefit under a particular notification at initial stage, he is not debarred, prohibited or estopped from claiming such benefit at a later stage.

8. This Tribunal in similar circumstances, in the case of IE Impex Pvt. Ltd. Vs. CC(Port), Kolkata [2008(224) ELT 71 (Tri. Kol.)] allowed the benefit of Notification No.94/96-Cus if Notification No.158/95 is not applicable, observed as under:-

5. After hearing both sides and perusal of case records, we are of the view that since at the time of importation, considering the peculiar circumstances of this case, the Departmental Authorities were satisfied that the imported goods despite no marks and numbers inscribed on it were identical to the goods earlier exported, had the Appellants declared the fact of re-export against the earlier import at the time of filing the shipping bill for the subsequent export, it is reasonable to presume that the Departmental Authorities would have come to the same conclusion regarding identity of the goods as they had come to at the time of initial import. Moreover, since the 2250 pieces have been exported under the DEPB scheme, it can be safely presumed, that at least description of the goods in question have been properly examined and on that basis it is possible to conclude that the Appellants have satisfied the condition under Notification No. 158/95. In any case, as argued by the ld. Sr. Advocate, the Appellants are independently entitled to exemption from duty under Notification No. 94/96 as held by the cited decisions of the Tribunal since they had not availed of any duty drawback, DEPB benefit etc. in view of entry at Sl. No. 3 of the said Notification. Therefore, even if, identity of the goods is held to be not established on account of the Appellants not intimating the Department regarding re-export, no duty would be chargeable in view of Notification No. 94/96. As such, on both counts, the case of the Appellants requires, to be viewed leniently and the duty demand confirmed under the impugned order requires to be set aside. We order accordingly and allow the appeal.

9. Following the aforesaid precedent and considering the facts and circumstances of the case that the goods have been duly exported after proper declaration in the shipping bills, we do not find justification in demanding duty from the appellant on the goods re-exported. 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 13.11.2024)