Heeralal Chhaganlal Tank Vs Commissioner Of Customs (CESTAT Delhi)
CESTAT Delhi held that the goods exported under LUT are admittedly imported within six months of the export then there is no liability to pay tax on re-import. Thus, reimporting of goods earlier exported for exhibition is eligible for exemption from Customs Duty including IGST under clause (5) of Notification No. 45/2017-Cus. dated 30.06.2017.
Facts- The importer- appellant had filed 10 Bills of Entry for re-import of goods exported earlier for participation in exhibition or on a consignment basis. While re-importing of these goods, the appellant-importer was exempted from Customs Duty under clause (5) of the Notification No. 45/2017-Cus. dated 30.06.2017.
The department formed opinion that at the time of re-import thereof, the importer was eligible for exemption under Sr.No.1 (c) or 1 (d) as the case may be, of the Table in Notification No. 45/2017-Cus. dated 30.06.2017 which exempts imported goods from so much duty of customs leviable thereupon which in excess of amount indicated in the corresponding entry in column (3) of the said table in the said notification. Since the appellant had claimed exemption under Sr.No.5 from whole of customs duty as also IGST, the department opined gross mis-declaration of exported goods.
Resultantly, the appellant was denied entitlement to exemption under Sr.5 of Notification No. 45/2017-Cus. dated 30.06.2017. Since appellant had not paid customs duty, amounting to Rs.1,20,17,423/- was proposed to be recovered from the appellant along with penalty and the goods imported by the said bill of entry were proposed to be confiscated. The said proposal has been confirmed vide Order-in-Original except proposal confiscating the goods under Bill of Entry was not accepted. Being aggrieved, the appellant is before this Tribunal.
Conclusion- Held that goods sent out of India on approval basis does not attract integrated tax at the time of re-import, the amount stands already paid, otherwise. The goods exported under LUT are admittedly imported within six months of the export then there is no liability to pay tax on re-import. Above all the export was not on bond as is the requirement of entry at Sr.No.1(d) of Notification dated 30.6.2017. Hence, the order under challenge about demand w.r.t. nine tabled Bills of Entry is liable to be set aside.
Held that reimport of the goods after return from the exhibition can be confirmed under Notification 45/2017-Customs dated 30.06.2017 provided reimport happens within six months from the date of delivery challans for export. Since the time limit was only condition for availing the benefit of Notification, we hold that the appellant cannot claim exemption from payment of integrated tax with reference to this one bill of entry. Thus, we hold that the benefit of the notification has rightly been denied with respect to one Bill of Entry. The demand w.r.t. said Bill of Entry is therefore upheld. The order under challenge to the extent of demand proportionate to the value of goods re-imported vide the said bill of entry is hereby sustained.
FULL TEXT OF THE CESTAT DELHI ORDER
The appellant in the present case are jewelers holding Import and Export Code No.1388003325. The importer- appellant had filed 10 Bills of Entry for re-import of goods exported earlier for participation in exhibition or on a consignment basis. While re-importing of these goods, the appellant-importer was exempted from Customs Duty under clause (5) of the Notification No. 45/2017-Cus. dated 30.06.2017. From the perusal of shipping bills, it appears that the goods were exported either under claim of refund of IGST paid on export or under LUT/Bond without payment of duty of IGST. The department formed opinion that at the time of re-import thereof, the importer was eligible for exemption under Sr.No.1 (c) or 1 (d) as the case may be, of the Table in Notification No. 45/2017-Cus. dated 30.06.2017 which exempts imported goods from so much duty of customs leviable thereupon which in excess of amount indicated in the corresponding entry in column (3) of the said table in the said notification. Since the appellant had claimed exemption under Sr.No.5 from whole of customs duty as also IGST, the department opined gross mis-declaration of exported goods. Resultantly, while issuing show cause notice F. No. VIII (H)10/15/Adj./2019/6056 dated 6.9.2019, the appellant was denied entitlement to exemption under Sr.5 of Notification No.45/2017 dated 30.6.2017. Since appellant had not paid customs duty, amounting to Rs.1,20,17,423/- was proposed to be recovered from the appellant along with penalty and the goods imported by the said bill of entry were proposed to be confiscated. The said proposal has been confirmed vide Order-in-Original No.04/2020-COMMISSIONER (P) Jodhpur dated 5.3.2020 except proposal confiscating the goods under Bill of Entry was not accepted. Being aggrieved, the appellant is before this Tribunal.
2.We have heard Shri Rahul Lakhwani, Chartered Accountant for the appellant and Shri M.K. Chawda, DR for the department.
3. Ld. Counsel for the appellant has mentioned that the adjudicating authority has failed to consider re-imported goods as such where there is no supply of goods involved. The goods were exported for exhibition and those were not sold in the exhibition there, were re-imported. The ownership of the goods does not transfer to buyer/consignee to whom the goods are sent and same remained with the appellant. Since there is no supply of goods in terms of section 7 (1) (c) of CGST Act that the Circular No.21/2019 dated 24.7.2019 issued by CBIC shall apply which clarified that such re-export shall not be considered as “Zero rated supply” as per provisions contained in section 16 of IGST Act, 2017. It is submitted that Sr.No.1(d) of Notification No. 45/2017-Cus. dated 30.06.2017 apply to the bill of entry where the goods were earlier exported under the claim of refund of IGST. For the bill of entry with respect to the goods which were exported on LUT Sr.No.1 will not apply as the re-export has been made within six months in compliance of the condition of Notification No. 45/2017-Cus. dated 30.06.2017. In the light of this discussion, the appellant is impressed upon to have rightly been claimed the benefit of residuary entry at Sr.No.5 of the notification. The show cause notice was issued on wrong premise, the demand confirmed based on wrong premise is therefore liable to be set aside. With respect to imposition of penalty, it is mentioned that there is no act or omission alleged in the show cause notice which may render the goods liable to confiscation in term of section 111(o) of Customs Act,1962. There was no mens-rea to evade payment of customs duty. The appellant had rightly availed exemption notification while reimporting goods which were exported for the purpose of exhibition, penalty cannot be imposed upon the appellant. Otherwise also the issue herein is the outcome of disputed interpretation of notification. Penalty is not imposable upon the appellant in said circumstance. With these submissions, the order is prayed to be set aside and appeal is prayed to be allowed.
5. While rebutting the submissions, ld. DR has mentioned that where the exported goods are not brought back within six months of the removal, the Exporter has to issue tax invoice and the supply would be taken place. In such cases, Sl.No.1(d) of Notification is applicable instead residuary entry of Sl.No.5 of Notification No. 45/2017-Cus. dated 30.06.2017. The said position has been clarified in the Circular No.108/27/2019-GST dated 18.7.2019 wherein para 7 has following words:-
