2024 (2) TMI 978 - AT - Customs

Tribunal Upholds Dismissal of Appeal Over Late Re-Export; Financial Hardship Not a Valid Excuse for Non-Compliance.

M/s. Alcock Mcphar Geotech India Versus Commr. of Customs (Admn & Port), Kolkata

The Tribunal upheld the decision of the Commissioner (Appeals) dismissing the appeal by the Appellant regarding the re-export of goods under Notification ... Re-exported goods after three years - Violation of Notification No. 27/2002-Cus - Show Cause Notice issued - HELD THAT:- Since Notification No. 27/2002-Cus is a conditional Notification, the conditions specified therein have to be fully complied with by the importer in order to enjoy the exempted benefit. The Commissioner (Appeals) vide impugned OIA has given the findings that ; '' The appellant did not submit any application to the competent authority for the extension of the period to one year, and did re-export after three years of the limit of extended period gets over, thus prima facie the Notification No. 27/2002-Cus has been violated, and on this basis only the appeal can be considered to be disposed off. The financial trouble of the appellant can not be the basis of his defence.'' Thus, he has dismissed the Appeal. Since the facts are not in dispute, we do not see any reason to interfere with the detailed and considered order passed by the Commissioner (Appeals). Accordingly, we dismiss the present Appeal. ISSUES PRESENTED AND CONSIDERED 1. Whether re-imported goods availing benefit of a conditional customs notification must be re-exported within the time limits specified in the notification, and whether failure to do so disentitles the importer from the exemption. 2. Whether financial difficulties or operational closure of the importer's office can excuse non-compliance with express conditions of a conditional customs notification. 3. Whether an appellant's unexplained non-appearance and repeated adjournments affect the Tribunal's exercise of discretion in hearing and disposing of the appeal. ISSUE-WISE DETAILED ANALYSIS Issue 1 - Obligation to comply with time-limit condition in conditional notification Legal framework: Notification No. 27/2002-Cus (dated 01/04/2002) is a conditional notification permitting re-imported goods to avail exemption only if re-export occurs within six months (with possible extension up to one year upon application). Precedent treatment: The Commissioner (Appeals) relied on authoritative pronouncements emphasizing that conditions of notifications must be adhered to verbatim and that notifications are to be read as part of the statutory scheme (citing Eagle Flask and Parle Export decisions as controlling principles). Interpretation and reasoning: The Court notes the notification is conditional and its specified conditions must be fully complied with to obtain exemption. The appellant re-exported after three years, beyond both the six-month limit and the one-year extended period; no extension application was made to the competent authority. Given undisputed facts about the delay, the Court accepted the Commissioner (Appeals)'s finding that the notification's condition was violated. Ratio vs. Obiter: Ratio - Conditional notifications confer exemption subject to strict compliance with stipulated conditions, and failure to comply with the time-limit condition disentitles the importer to the exempted benefit. The reliance on the cited Supreme Court principles forms part of the binding reasoning. Obiter - none material beyond the holding. Conclusion: The exemption under the conditional notification is forfeited where re-export occurs well beyond the prescribed period without any authorised extension; the appeal challenging demand on this ground must fail. Issue 2 - Whether financial difficulties/office closure excuse non-compliance with notification conditions Legal framework: There is no provision in the conditional notification permitting deviation or relaxation of its conditions on grounds of the importer's financial difficulty or office closure; compliance is mandatory to obtain benefit. Precedent treatment: The Commissioner (Appeals) applied the principle from Eagle Flask that 'the Conditions of the Notifications should be adhered verbatim,' treating such principles as binding on fact application. Interpretation and reasoning: The Court accepted the Commissioner (Appeals)'s view that financial trouble or closure of office, although asserted by the appellant at personal hearing, cannot form a legal basis to excuse or justify failure to comply with an express statutory/notification condition. The lack of statutory or notification provision to grant relief for such circumstances means these are not valid defenses to non-compliance. Ratio vs. Obiter: Ratio - Personal or commercial hardships do not excuse non-compliance with express conditions of a conditional notification absent provision for relief; this is decisive on entitlement to exemption. Obiter - the factual observation that such hardships were asserted but not legally persuasive. Conclusion: Financial difficulties and office closure do not permit relaxation of the notification's time limits; the appellant's stated hardships do not affect the validity of the demand. Issue 3 - Effect of appellant's non-appearance and repeated adjournments on appeal disposal Legal framework: Appellate practice permits adjournments but repeated non-appearance may justify proceeding with the matter and disposing of the appeal on the record. Precedent treatment: The Tribunal proceeded to hear the appeal in the absence of the appellant due to multiple prior adjournments and non-attendance, using the appellant's authorized representative and the appeal papers to determine the matter. Interpretation and reasoning: The Court observed more than four adjournments had been granted and the appellant repeatedly failed to appear. Given the appeal related to year 2014 and facts were undisputed, the Tribunal exercised discretion to proceed and decided the appeal on merits with assistance of the respondent's Authorized Representative and the record. This procedural approach did not prejudice the appellant given their failure to pursue the matter. Ratio vs. Obiter: Ratio - Repeated non-appearance and unexplained adjournments justify the Tribunal in proceeding to hear and decide the appeal on the available record; such procedural default does not preclude an appellate determination on merits where facts are not in dispute. Obiter - the Court's characterization of timing and interest of justice considerations. Conclusion: The Tribunal properly exercised discretion to hear and dismiss the appeal despite the appellant's absence due to prior repeated adjournments and undisputed facts. Cross-reference The conclusions on Issues 1 and 2 are interlinked: because the notification is conditional and strictly construed (Issue 1), asserted financial hardship cannot override the statutory/notification condition (Issue 2); together these support dismissal of the appeal. Issue 3 supports the procedural propriety of the Court's disposal on the record.