Re-import of defective exported goods after separate replacement export does not require reversal of earlier export benefits under the notification.

Where defective originally exported goods are re-imported after a separate replacement consignment has been exported, the re-import is not treated as one requiring reversal of the earlier export benefits with interest merely because such benefits were availed on the original export. On the stated facts, Sr. No. 1 of Notification No. 46/2017-Customs dated 30.06.2017 was inapplicable and Sr. No. 5 applied, so the goods were eligible for assessment under that entry without prior reversal of export benefits. The impugned assessment and appellate order were set aside and the amount deposited towards export benefit was directed to be refunded.

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Issues: Whether the re-imported goods were covered by Sr. No. 1 or Sr. No. 5 of Notification No. 46/2017-Customs dated 30.06.2017, and whether the appellant was required to reverse the export benefits with interest before clearance of the re-imported goods.

Analysis: The original consignment was exported and export benefit was availed on that export. After the goods were found defective, a replacement tank was exported under a separate shipping bill. The re-imported goods were the defective original consignment, not the replacement consignment. Since the replacement goods were also exported, the factual basis adopted by the lower authorities for treating the re-import as one attracting reversal of export benefits did not hold. On these facts, Sr. No. 1 of Notification No. 46/2017-Customs dated 30.06.2017 was held inapplicable, while Sr. No. 5 was held to apply.

Conclusion: The appellant was not required to reverse the export benefits with interest on the original export before clearance of the re-imported goods, and the goods were entitled to assessment under Sr. No. 5 of Notification No. 46/2017-Customs dated 30.06.2017.

Final Conclusion: The impugned assessment and appellate order were set aside, the appeal was allowed, and the amount deposited towards export benefit was directed to be refunded to the appellant.

Ratio Decidendi: Where defective originally exported goods are re-imported after a replacement consignment has been separately exported, the re-import is not to be treated as a case requiring reversal of the earlier export benefits merely because export benefits had been availed on the original export.

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