Re-importation time extension under customs notification justified where exported goods were rejected after FDA failure and no revenue loss arose.

Extension of the one-year period for re-importation under Notification No. 94/96-Cus was justified where exported goods were rejected by the foreign buyer after failing FDA testing, and correspondence showed re-importation was necessitated by those circumstances. The Tribunal noted that the goods were later re-exported and the DEPB benefit had been reversed, so the Revenue suffered no loss. On those facts, refusal to extend time was unjustified, the denial of notification benefit was set aside, and the customs demand based on delayed re-importation did not survive.

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Issues: Whether extension of time beyond one year for re-importation of the exported goods could be granted under Notification No. 94/96-Cus dated 16.12.1996, and whether denial of that benefit justified confirmation of customs duty demand.

Analysis: The goods had been exported, rejected by the foreign buyer on account of failure to clear FDA testing, and correspondence between the parties showed that re-importation was necessitated by those circumstances. The Tribunal also noted that the goods were subsequently re-exported and the DEPB benefit had been deposited back, so there was no loss to the Revenue. On these facts, the refusal to extend the time limit for re-importation was found to be unjustified.

Conclusion: Extension of time for re-importation was required to be allowed, and the order denying the benefit of the notification was set aside.

Final Conclusion: The customs demand founded on delayed re-importation did not survive, and both appeals were allowed.

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