Re-export of duty-free imported goods allowed despite partial use, where the balance goods were identifiable and unrestricted.

Duty-free imported parts received for job work could be re-exported even though the foreign supplier no longer required the work and some of the goods had already been used in manufacture of sub-assemblies. Although the specific notification condition for re-export of defective or unfit materials was not strictly met, the Foreign Trade Policy allowed re-export of imported goods where no import or export restriction applied, and the goods were not shown to be restricted. Re-export could not be denied merely because the goods were partially used, provided the balance goods were properly identified as the same imported goods. The rejection of re-export was therefore unsustainable.

---

---

Issues: Whether the appellant was entitled to re-export duty-free imported parts of printing machinery when the foreign supplier no longer required further job work and the goods had already been partly used for manufacture of sub-assemblies.

Analysis: The imported materials were received duty-free under Notification No. 93/2004-Cus. The condition in the notification permitting re-export of materials found defective or unfit for use was not strictly satisfied because part of the goods had already been used. However, the Foreign Trade Policy permitted re-export of imported goods where there was no restriction on import or export, and the goods were not shown to be restricted. The request was one for re-export of balance goods in the hands of a job worker, not a case involving confiscation or demand of duty. In such circumstances, re-export of goods imported duty-free could not be refused merely because they had been partially used, and the re-export had to be allowed subject to identification of the imported goods. If duty had been paid, re-export would have been governed by Section 74 of the Customs Act, 1962 on drawback, but that did not alter the entitlement in the present nil-assessment situation.

Conclusion: The rejection of re-export was unsustainable, and the appellant was entitled to re-export the balance imported goods subject to proof that the goods to be exported were the same as those imported.

---