Re-export condition in import exemption upheld, with duty sustained for cylinders not sent back within time.

An exemption for imported gas cylinders was conditional on re-export to the foreign supplier within six months of import. As the appellants remained in default for more than six years, the notification conditions were treated as unfulfilled and duty liability was sustained. The appellate authority had already allowed re-export of cylinders ready for shipment and confirmed duty only on the balance, which was treated as a balanced approach. On that basis, no interference with the duty demand was warranted, and the order under challenge was upheld.

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Issues: Whether the appellants, having imported gas cylinders under an exemption notification subject to re-export within the stipulated period, were liable to pay duty for failure to re-export the cylinders within time.

Analysis: The exemption was availed on the clear condition that the empty gas cylinders would be re-exported to the foreign supplier within six months from the date of import. The appellants remained in default for more than six years after importing the cylinders, despite having executed a bond backed by bank guarantee. The appellate authority had already taken a balanced view by permitting re-export of cylinders that were ready for export and confirming duty only in respect of the remaining cylinders. In these circumstances, the conditions of the notification were not complied with and no interference with the duty demand was warranted.

Conclusion: The failure to satisfy the re-export condition justified confirmation of duty, and the order under challenge was upheld against the appellants.

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