Re-imported goods retain exempt status when they are the same goods and unchanged, avoiding customs duty liability.

Re-imported goods were treated as the same goods earlier exported, with no contrary evidence showing any material difference or substantial change in character. On that factual basis, Notification No. 94/96-C.E. dated 16-12-1996 applied to preserve the goods' exempt status, and re-importation did not create customs duty liability merely because the goods returned to India. The operative effect was that the goods were held not liable to customs duty, with the issue decided in favour of the assessee.

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Issues: Whether goods re-imported into India were liable to customs duty where the goods exported earlier had not enjoyed any tax incentive benefit and were shown to be the same goods, without any substantial change, covered by Notification No. 94/96-C.E. dated 16-12-1996.

Analysis: The notification governing re-importation was applied to the undisputed factual position that the goods brought back were the very same goods that had earlier gone out of India. No contrary evidence was shown to establish that the exported goods and re-imported goods were different. The absence of any substantial change in the character of the goods meant that goods originating from an exempted area did not lose that character merely on re-importation.

Conclusion: The re-imported goods were not liable to customs duty, and the issue was decided in favour of the assessee.

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