Customs exemption conditioned on re-export remained enforceable despite alleged impossibility; duty liability survived.

An exemption from customs duty under Notification No. 97/78 was conditioned on re-export of the imported containers within two months, with the bond expressly providing that duty would become payable if re-export did not occur. The arrangement was treated as an express risk allocation, so alleged impossibility of re-export did not void the duty obligation under Section 56 of the Indian Contract Act, 1872. The importer therefore remained liable to pay customs duty, and the demand was sustained in favour of the Revenue.

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Issues: Whether the exemption from customs duty under Notification No. 97/78 stood defeated when the importer failed to re-export the containers within the stipulated period, and whether the condition became void because performance had allegedly become impossible.

Analysis: The exemption was granted on the condition that the containers would be re-exported within two months, failing which duty would become payable. The bond executed by the importer expressly contemplated payment of duty if re-export did not take place. Even if re-export had become impossible for reasons beyond the importer's control, the obligation to pay duty under the alternative stipulation remained enforceable. The arrangement was treated as one containing an express risk clause and therefore did not attract Section 56 of the Indian Contract Act, 1872.

Conclusion: The condition was not void for impossibility, and the importer remained liable to pay customs duty. The decision was in favour of the Revenue.

Final Conclusion: The appeal succeeded and the demand of duty was sustained.

Ratio Decidendi: Where an exemption notification and bond provide for re-export within a specified time and expressly require payment of duty upon failure to do so, the obligation to pay duty remains enforceable notwithstanding alleged impossibility of re-export.

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