Alternate exemption on re-import may be claimed when the original notification fails due to unmet post-import conditions.

Where re-imported goods were initially cleared under an exemption notification requiring re-export within a stipulated period, failure to satisfy that post-import condition did not automatically bar the importer from seeking an alternative exemption notification. CESTAT Mumbai noted that, if the importer was otherwise eligible for the later notification, denial of the benefit merely because it was claimed after the original notification became unavailable was unjustified. The operative principle is that an alternate exemption can be availed when the first claimed exemption fails due to non-compliance with a post-import condition, and the adverse order was therefore unsustainable.

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Issues: Whether, on failure to fulfil the post-import condition attached to the exemption claimed at the time of re-import, the importer could be granted the alternate exemption notification.

Analysis: The imported goods were re-imported under Notification No. 158/95-Cus. with the condition that they would be re-exported within the stipulated period. Since the re-export condition was not fulfilled for unavoidable reasons, the importer sought the benefit of the alternate Notification No. 94/96-Cus. The denial of exemption merely because the alternate notification was claimed later was not justified where the importer was otherwise eligible for the statutory benefit. The issue was treated as covered by the principle that an alternate exemption notification can be availed when the initially claimed notification becomes unavailable due to non-compliance with a post-import condition.

Conclusion: The importer was entitled to claim the alternate exemption Notification No. 94/96-Cus., subject to eligibility, and the adverse order was unsustainable.

Ratio Decidendi: Where an exemption notification claimed at import fails because a post-import condition is not met, the assessee may be allowed the benefit of an alternate exemption notification otherwise applicable to the goods.

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