1996 (6) TMI 220 - AT - Central Excise

Tribunal overturns duty demand on re-imported goods, citing double taxation issue

The Tribunal set aside the lower authority's order confirming a duty demand for goods treated as re-import due to an abandoned export voyage. The Tribunal ... Demand - Export of goods by executing B-1 Bond Issues:Duty demand confirmation for goods treated as re-import due to abandoned export voyage, demand for excise duty despite payment of customs duty, interpretation of Section 20 of the Customs Act, applicability of Supreme Court judgment on completion of export, justification of excise duty demand.Analysis:The appeal challenged the Order-in-Appeal confirming a duty demand for goods cleared under AR 4 form without payment of duty but treated as re-import due to an abandoned export voyage. The Appellant argued that since customs duty was paid and export deemed to have occurred, demanding excise duty would result in double taxation. The Respondent contended that the B-I Bond required proof of due export, which was not provided, making the Appellant liable for excise duty.The Tribunal noted the factual agreement that customs duty under Section 20 of the Customs Act was paid. Referring to the Supreme Court judgment in Collector v. Sun Exports, the Tribunal emphasized that once goods leave Indian Territorial Waters, export is complete. The Customs Department confirmed the export by charging import duty on the goods, indicating compliance with the Supreme Court's ruling.Section 20 of the Customs Act, 1962, deals with goods manufactured in India duly exported and re-imported, subjecting them to the same terms as foreign origin goods. The proviso specifies that if goods are re-imported within 3 years, customs duty equal to excise duty or claimed drawback should be charged. The present case falls under Clause (c)(iii) of the proviso, where goods were exported under Bond without duty payment.Given that customs duty was collected under Section 20(1) proviso, treating the return of goods as importation, the Tribunal concluded that there was no basis to levy excise duty. Citing the Supreme Court's judgment, the Tribunal held that raising an excise duty demand was unjustified and unsustainable. Consequently, the lower authority's order confirming the duty demand was set aside, and the appeal was allowed with consequential reliefs.