Customs exemption under Notification No. 32/97-Cus. cannot be denied merely because drawback was claimed on some shipping bills.

Customs exemption under Notification No. 32/97-Cus. could not be denied merely because drawback was claimed on some shipping bills relating to job-work imports and export after prescribed value addition. The Tribunal treated the imports of unit soles as covered by the notification for manufacture of men's shoes for export, and held that the proper course, if any violation arose, was to deny drawback or DEPB benefits rather than withdraw the customs exemption itself. The denial of exemption was therefore unsustainable, and the assessee remained entitled to the notification benefit.

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Issues: Whether the benefit of exemption under Notification No. 32/97-Cus. could be denied merely because drawback was claimed on some shipping bills for imports made for job work and export after prescribed value addition.

Analysis: The exemption was claimed for import of unit soles used in the manufacture of men's shoes for export under the notification. The denial was based only on the fact that drawback had been claimed on some shipping bills. The Tribunal followed its earlier decision on an identical issue and accepted that imports under the notification were meant for jobbing. It held that the proper course, at most, was to deny drawback or DEPB benefits, and not to withdraw the customs exemption itself.

Conclusion: The denial of exemption was unsustainable and the assessee was entitled to the benefit of Notification No. 32/97-Cus.

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