Re-import of exported jewellery remained exempt, as the policy time limit was regulatory and not a bar to import.

Re-import of jewellery earlier exported was held to remain eligible for exemption under Notification No. 94/96-Cus. where the goods were the same as those exported and the customs notification under Section 25(1) of the Customs Act permitted re-import within the prescribed period. The 60-day limit in the foreign trade policy was treated as a regulatory condition, not a prohibition on import, so breach of that policy timeline alone did not justify denial of exemption. On that basis, the grounds for confiscation under Section 111(o) and penalty under Section 112(a) did not survive.

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Issues: Whether re-import of the exported jewellery beyond the period mentioned in the foreign trade policy disentitled the assessee from exemption under Notification No. 94/96-Cus. and rendered the goods liable to confiscation and penalty.

Analysis: The goods were found to be the same as those earlier exported, and the notification governing re-import under Section 25(1) of the Customs Act, 1962 allowed re-import of such goods within the prescribed period. The 60-day time limit in the foreign trade policy was treated as a regulatory condition and not as a prohibition on import. Since the notification permitted re-import within the longer period recognised therein, breach of the policy time limit by itself did not justify denial of exemption. In the circumstances, the basis for confiscation under Section 111(o) and penalty under Section 112(a) did not survive.

Conclusion: The assessee was entitled to the benefit of Notification No. 94/96-Cus.; the confiscation and penalty were unsustainable.

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