2016 (6) TMI 393 - AT - Customs

Tribunal grants appeal for DEPB re-credit, preventing undue enrichment, based on Customs Act & legal precedents.

The Tribunal allowed the appeal for re-credit of the DEPB amount, emphasizing duty refund for re-exported defective goods under the Customs Act to prevent ... Seeking issuance of certificate to the DGFT for re-credit of the DEPB amount which was debited at the time of import - Non-fulfillment of conditions 3(i) and (ii) of Board Circular No. 75/2000-Cus dated 11.09.2000 - goods imported and cleared by debiting the duty credit under DEPB licence - re-export of goods being found not suitable for their purposes within 6 months from the port of registration of the DEPB - Held that:- no importer will re-export the goods as unsuitable if it is not so, hence any duty discharged on such goods re-exported needs to returned to an importer. The issue is no more res integra, covered by the judgment of the Hon'ble Supreme Court in the case of Rochiram & Sons Vs. Union of India [2008 (4) TMI 45 - SUPREME COURT]. Therefore, the impugned order is unsustainable and set aside. - Decided in favour of appellant with consequential relief Issues:1. Re-credit of DEPB amount for re-exported goods under Customs Act.2. Compliance with conditions for re-export under DEPB Scheme.3. Applicability of relevant circulars and judgments in similar cases.Analysis:Issue 1: Re-credit of DEPB amountThe appellant exported goods due to defects and requested re-credit of DEPB amount debited during import. The lower authority rejected the claim citing non-compliance with conditions, including the six-month re-export period. The first appellate authority upheld this decision. However, the appellant argued that the imported goods were of unacceptable quality, fulfilling the Customs Act requirements for re-export. The Tribunal agreed, citing the judgment in Rochiram & Sons Vs. Union of India, emphasizing that duty paid on re-exported defective goods should be returned to the importer to avoid undue enrichment for the Revenue. The Tribunal set aside the impugned order, allowing the appeal with consequential relief.Issue 2: Compliance with DEPB Scheme conditionsThe lower authority observed discrepancies in the re-export process, such as the mismatch in import and export locations and exceeding the six-month re-export period. This led to the rejection of the re-credit claim. The appellant contended that they complied with the Customs Act by establishing the goods' identity and timely re-export. The Tribunal agreed with the appellant, emphasizing that the Revenue accepted the unsuitability of the goods by allowing re-export. The judgment highlighted the importance of ensuring duty paid on re-exported defective goods is returned to the importer, as per the Customs Act.Issue 3: Applicability of circulars and judgmentsThe lower authorities relied on Circular No. 75/2000-Cus to reject the re-credit claim based on non-compliance with conditions. The appellant cited judgments like Rochiram & Sons and Cipla Ltd. Vs. Commissioner of Customs to support their claim for re-credit. The Tribunal found the issue to be settled law, emphasizing the principle of avoiding undue enrichment for the Revenue and ensuring duty paid on defective goods re-exported is returned to the importer. This led to the Tribunal setting aside the impugned order and allowing the appeal with consequential relief.In conclusion, the Tribunal's judgment focused on the legal principles of duty refund for re-exported defective goods under the Customs Act, emphasizing the need to prevent undue enrichment for the Revenue and ensuring compliance with re-export conditions under the DEPB Scheme. The decision was based on established legal precedents and relevant circulars, ultimately allowing the appeal for re-credit of the DEPB amount.