Customs exemption claim challenged where conflicting findings and possible domestic diversion required remand for reconsideration

Contradictory findings between the adjudicating authority and the Tribunal on entitlement to a customs exemption, together with material suggesting diversion of imported labels for local sale, required fresh examination of the record. The adjudicating authority had found a false claim to exemption and possible domestic diversion, while the Tribunal proceeded on a different factual premise and noted the absence of a minimum export volume condition. Because the appellate reasoning was inconsistent with the original findings and the exemption appeared linked to bona fide export activity, the Tribunal's order was set aside and the matter remanded for reconsideration.

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Issues: (i) Whether the Tribunal's order denying the customs exemption and setting aside the adjudication could stand in view of the contradictory findings recorded by the adjudicating authority and the Tribunal, and the material suggesting diversion of the imported goods for local sales.

Analysis: The adjudicating authority had recorded adverse findings that the importer had made a false claim to avail the exemption and had diverted the imported labels for domestic use. The Tribunal, however, proceeded on the footing that there was no finding that the importer was not an exporter and that no minimum export volume was prescribed in the notifications. The inconsistency between these findings, coupled with the statements indicating intended local sale, required fresh consideration of the claim in the light of the original adjudicatory record.

Conclusion: The Tribunal's order could not be sustained and the matter had to be remanded for reconsideration.

Final Conclusion: The appeal succeeded to the extent of setting aside the Tribunal's order and sending the matter back for fresh decision, without any answer being returned on the substantive questions of law.

Ratio Decidendi: Where the appellate finding proceeds on a premise contrary to the adjudicating authority's recorded conclusions and the material on record indicates possible misuse of an exemption intended for bona fide export activity, remand for reconsideration is warranted.

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