2001 (4) TMI 139 - AT - Customs

Tribunal allows duty-free re-export in job work case, emphasizing importer's fulfillment of export obligations. /97

The Tribunal allowed the appeal, permitting re-export without duty payment in a case challenging duty demands on imports for job work under Notification ... Import of goods free of cost for jobbing Issues:1. Stay application against duty demand confirmation on imports2. Permission for re-export on payment of 10% of CIF value3. Interpretation of Notification 32/97 regarding duty-free imports for job work4. Discrepancy in fulfilling export obligations leading to duty demand5. Consideration of jobbing work and ownership of imported goods6. Decision on allowing re-export without duty paymentAnalysis:1. The appellants filed a stay application challenging the duty demand of Rs. 48,36,118/- confirmed by the Commissioner on imports made through different locations. The duty amount was ordered to be paid immediately with interest, but no penalty was imposed. The appellants also sought permission for re-export on payment of 10% of the CIF value, which was agreed by the foreign supplier. The Tribunal heard arguments and decided to proceed with the final decision with the consent of both sides.2. The Tribunal referred to a Supreme Court case emphasizing that in situations where an importer fails to pay for and take delivery of goods, the exporter should not lose ownership rights. In the present case, the goods were imported duty-free for job work under Notification 32/97 but could not be processed and re-exported within the specified time frame due to technical issues. The Tribunal noted that the jobbing work did not involve a transfer of ownership, and not allowing re-export would hinder international trade efforts. Therefore, the Tribunal decided to allow export without insisting on payment of any duty.3. The Commissioner confirmed duty demands on the basis that the importers failed to fulfill export obligations within the stipulated time due to the cancellation of the export order. The importers were required to re-export goods with a value addition of 10% under the Exim Policy. The Commissioner concluded that since the importers did not fulfill the conditions mentioned in the bond, the full dues were required to be paid. However, the Tribunal disagreed with this conclusion, emphasizing the importance of not burdening job workers with duty liabilities in case of bona fide failures.4. The Tribunal considered the findings of the Commissioner and the offer by the importer to re-export goods on payment of 10% of the CIF value, which was agreed to by the foreign supplier. The Tribunal found no objection to permitting export on the terms offered and decided to allow the appeal by directing the export to be permitted without demanding any duty payment.