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Issues: (i) Whether imported goods repacked for retail sale ceased to be goods sold "as such" so as to lose the benefit of the exemption under Notification No. 56/98-Cus.; (ii) Whether the demand of special additional duty was barred by limitation in the absence of suppression of facts.
Issue (i): Whether imported goods repacked for retail sale ceased to be goods sold "as such" so as to lose the benefit of the exemption under Notification No. 56/98-Cus.
Analysis: The exemption notification applied to goods imported for sale as such, subject to the prescribed declaration. The imported goods were repacked, but no process was shown to have changed their identity or character. The legal fiction of manufacture in the excise tariff chapter note could not be imported to construe the customs exemption notification. The purpose of special additional duty was to place imported goods on par with local goods on which sales tax was paid, and that objective was already satisfied here.
Conclusion: The goods continued to be sold as such and the benefit of the exemption could not be denied; the issue is decided in favour of the assessee.
Issue (ii): Whether the demand of special additional duty was barred by limitation in the absence of suppression of facts.
Analysis: The assessee had disclosed the relevant facts and declarations, and there was no material suppression warranting invocation of the extended period. Once the department was aware of the material particulars, it was for it to seek further clarification within the normal period.
Conclusion: The demand was time-barred; the issue is decided in favour of the assessee.
Final Conclusion: The impugned order was unsustainable both on merits and on limitation, and the appeal succeeded.
Ratio Decidendi: A customs exemption for goods imported for sale as such cannot be denied merely because the goods are repacked, if their identity remains unchanged and the statutory purpose of parity with sales-tax-bearing local goods is otherwise satisfied; the extended limitation period is unavailable absent suppression of facts.
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