2011 (7) TMI 1104 - HC - Customs

Exporter denied exemption for finished leather due to lack of protective coating, High Court affirms decision.

Nagalakshmi & Co. Versus CESTAT

The High Court dismissed the Civil Miscellaneous Appeal and connected Miscellaneous Petition, upholding the denial of exemption to the exporter of ... - Issues:1. Benefit of Customs Notification2. Compliance with terms and conditions of the Government of India notification3. Denial of exemption based on quality of products4. Challenge before Commissioner of Customs (Appeals)5. Confirmation of order by Commissioner of Customs (Appeals)6. Challenge before Customs, Excise and Service Tax Appellate Tribunal (CESTAT)7. Discrepancy in samples submitted for testing8. Rejection of reliance on Note 3 of the notification9. Absence of protective coating as the basis for denial of exemption10. Factual adjudication by authorities11. Lack of legal question for appealAnalysis:The appellant, an exporter of finished leather, sought the benefit of Sl. No. 3 of the Customs Notification dated 17-10-2000. However, the request was rejected on the grounds that the 'Nappa Goat Leather' did not comply with the terms and conditions specified in the Government of India notification dated 27-5-1992. This rejection led to the filing of a Civil Miscellaneous Appeal.The appellant claimed the benefits of an exemption notification dated 27-5-1992 for exporting finished leather. A report from the Central Leather Research Institute (CLRI) in Chennai was obtained to address doubts about the quality of the products. The CLRI report indicated that the leather did not meet the norms and conditions for finished leather, specifically citing the 'Absence of Protective Coat' as the reason for denial of exemption.The order denying the exemption was challenged before the Commissioner of Customs (Appeals), who upheld the original authority's decision. Subsequently, the case was taken to the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) in Chennai. The CESTAT noted a discrepancy in the samples submitted for testing, leading to conflicting certification by the CLRI scientist. The Tribunal rejected the appellant's reliance on Note 3 of the 1992 notification due to the complete absence of protective coating, ultimately affirming the decision of the lower authorities based on factual findings.The High Court observed that the issue was decided against the appellant by the fact-finding authorities, emphasizing the absence of protective coating as the key factor in denying the exemption claim. As the Tribunal acted as the final fact-finding authority and based its decision on evidence, the Court concluded that no legal question, let alone a substantial one, arose for consideration in the appeal. Consequently, the Civil Miscellaneous Appeal was dismissed along with the connected Miscellaneous Petition, without any costs.