Proof of re-export defeats duty demand and penalty where the evidence is accepted on appeal.

Proof of re-export of a container defeated the duty demand and penalty because the appellate authority accepted the evidence of re-export and set aside the levy. The refusal of further extension by the original authority did not justify sustaining duty once re-export was established within the proceedings. On that basis, the Revenue's challenge failed and the demand was held unsustainable.

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Issues: Whether the demand of duty and penalty on the container could be sustained when proof of re-export was produced and accepted.

Analysis: The container had been brought into India with a requirement that it be re-exported within the stipulated period. Proof of re-export was subsequently produced before the appellate authority, which accepted the evidence and set aside the demand and penalty. The rejection of further extension by the original authority was held not to justify sustaining the duty demand when re-export was proved.

Conclusion: The duty demand and penalty were not sustainable and the appeal by the Revenue was rejected.

Final Conclusion: Acceptance of proof of re-export defeated the duty demand, and the Revenue's challenge failed.

Ratio Decidendi: Where re-export of the container is proved, duty cannot be sustained merely because further extension of time was refused.

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