Re-export evidence under ATA Carnet exemption can defeat customs duty demand when authorities ignore credible documentary proof.

Goods imported under the ATA Carnet exemption regime remained exempt from customs duty only if they were re-exported within the stipulated period. The court record indicated that the Certificate of Disposition was authentic and was supported by later correspondence from the foreign guaranteeing association confirming re-exportation. Because the authorities rejected that material on an incorrect factual premise and ignored relevant evidence, the demand for customs duty, education cess, and interest was held unsustainable and the impugned orders were quashed.

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Issues: Whether the Certificate of Disposition and supporting correspondence established re-exportation of the goods imported under the ATA Carnet, so as to render the customs duty demand and consequential interest unsustainable.

Analysis: The goods were imported under the ATA Carnet scheme notified under Section 25(1) of the Customs Act, 1962, which exempted such goods from customs duty subject to their re-export within the stipulated period. The authorities rejected the petitioner's proof of re-exportation mainly on the ground that the Certificate of Disposition did not relate to the carnet in dispute. The certificate, however, was on record, its authenticity was not doubted, and it was supported by later communication from the foreign guaranteeing association clarifying that the goods had been re-exported. The conclusion reached by the appellate and revisional authorities ignored relevant material and rested on an incorrect factual premise.

Conclusion: The demand for customs duty, education cess, and interest could not be sustained. The impugned orders were unsustainable and were quashed in favour of the assessee.

Ratio Decidendi: Where credible documentary evidence establishes re-exportation of goods imported under an exemption regime, and such evidence is not shown to be false or unreliable, the demand raised for non-re-export cannot stand if the authorities disregard material facts or proceed on an incorrect factual assumption.

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