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<h1>Differential duty applies if re-export conditions not met. Revenue-neutrality doesn't waive substantive requirements. Appeal dismissed, lower orders upheld.</h1> <h3>Lahari Impex Pvt. Ltd., Indo Tech Transformers Ltd., Cylinder Liners Agencies (P) Ltd. and Madras Engineering Industries (P) Ltd. Versus Commissioner of Customs, Chennai</h3> Lahari Impex Pvt. Ltd., Indo Tech Transformers Ltd., Cylinder Liners Agencies (P) Ltd. and Madras Engineering Industries (P) Ltd. Versus Commissioner of ... Issues Involved:1. Differential duty levy on re-imported goods under Notification No.158/95-Cus.2. Revenue-neutrality of the demand.3. Applicability of Notification No.94/96-Cus. as an alternative.Issue-wise Detailed Analysis:1. Differential Duty Levy on Re-imported Goods under Notification No.158/95-Cus.:The appellants re-imported goods for repairs/reconditioning under Notification No.158/95-Cus., which mandates re-export within six months (extendable by another six months). Failure to comply with this condition led to the issuance of a Show Cause Notice (SCN) and subsequent demand for differential duty. The core issue was whether differential duty could be levied when the goods were re-exported beyond the prescribed period. The Tribunal noted that Notification No.158/95-Cus. is a special provision facilitating duty-free re-importation for repairs, provided the goods are re-exported within a stipulated period. Non-compliance with this substantive condition necessitates payment of the duty forgone at the time of re-importation.2. Revenue-neutrality of the Demand:One appellant argued that the demand should be set aside on the ground of revenue-neutrality, as they would be entitled to claim duty drawback under Section 74 of the Customs Act, 1962, upon re-export. However, the Tribunal held that the conditions of Notification No.158/95-Cus. are substantive and must be strictly complied with. The duty forgone must be paid if the re-export condition is not met, irrespective of potential duty drawback claims.3. Applicability of Notification No.94/96-Cus. as an Alternative:Appellants contended that they should be allowed to claim the benefit of Notification No.94/96-Cus. if they failed to comply with Notification No.158/95-Cus. The Tribunal examined Notification No.94/96-Cus., which provides duty exemption for re-imported goods without requiring re-export. The Tribunal found significant differences between the two notifications. Notification No.94/96-Cus. applies to goods re-imported under various export schemes (DEEC, EPCG, DEPB) and does not mandate re-export. In contrast, Notification No.158/95-Cus. specifically facilitates re-importation for repairs/reconditioning with a mandatory re-export condition. The Tribunal held that the appellants could not switch from one notification to another to bypass the conditions of Notification No.158/95-Cus. The Supreme Court's ruling in Indian Rayon and Industries supported this view, emphasizing that importers must comply with the conditions of the notification under which they initially claimed benefits.Conclusion:The Tribunal affirmed that:- Differential duty is leviable if re-export conditions under Notification No.158/95-Cus. are not met.- Revenue-neutrality does not negate the requirement to comply with substantive conditions of the notification.- Appellants cannot claim the benefit of Notification No.94/96-Cus. as an alternative to Notification No.158/95-Cus.All appeals were dismissed, upholding the orders of the lower authorities.