Re-imported goods later re-exported: duty and interest were held unsustainable despite delayed re-export under the exemption notification.

Re-imported goods that were later re-exported did not attract duty merely because the re-export occurred after the prescribed six-month period under Notification No. 158/95-Cus, where the fact of re-export was undisputed and the competent authority could extend the time limit. On those facts, the Tribunal agreed that the exemption could not be denied solely for delayed re-export, so no duty demand arose. As no duty was payable, the corresponding interest claim also failed and was held unsustainable.

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Issues: Whether duty and interest could be demanded on re-imported goods which were subsequently re-exported after the prescribed six-month period, notwithstanding the claimed exemption under Notification No. 158/95-Cus.

Analysis: The goods had been exported, re-imported, and later re-exported. The fact of re-export was not disputed. The Tribunal noted that the competent authority had power to extend the time limit for re-export beyond six months. On the facts, the Tribunal agreed with the appellate authority that, since the goods had already been exported and were ultimately re-exported, duty demand did not arise merely because the re-export took place after the stipulated period. As no duty was payable, no interest liability could survive.

Conclusion: The demand of duty and the consequential interest were held to be unsustainable, in favour of the assessee.

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