Export under bond bars later excise demand when the goods are reimported; recovery, if any, lies under customs law.

Goods validly cleared without duty under bond and exported under the Central Excise Rules, 1944 could not be subjected to a later excise demand merely because they were subsequently returned to India and used in the original domestic project. The export formalities were completed, proof of export was accepted, and the bond and bank guarantee were discharged. In those circumstances, the excise authorities had no provision under the Central Excise Act, 1944 to recover duty again under the proviso to section 11A; any recovery, if otherwise permissible, would have to arise under customs law on a separate statutory basis.

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Issues: Whether central excise duty could be demanded under the proviso to Section 11A of the Central Excise Act, 1944 in respect of goods cleared without payment of duty under bond and exported, when they were later returned to India and used for the original domestic project.

Analysis: The goods were admittedly cleared under AR-4 without payment of duty and exported under bond. The export formalities under Rule 13 of the Central Excise Rules, 1944 were complied with, the proof of export was accepted by the department, and the bond and bank guarantee were discharged. Once export under bond stood completed, the excise authorities had no provision under the Central Excise law to recover duty merely because the goods were subsequently returned to India. Any recovery, if otherwise permissible, would arise under customs law and not under excise law.

Conclusion: The duty demand under Section 11A was not sustainable and the issue was decided in favour of the assessee.

Final Conclusion: The impugned demand was set aside as the exported goods had already satisfied the statutory excise export procedure and no excise levy could be re-imposed on their later return.

Ratio Decidendi: Where goods are validly cleared without duty under bond and export formalities are completed, central excise duty cannot later be demanded merely because the exported goods are subsequently brought back to India; any such recovery must rest on a separate statutory basis.

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