Substance over form in DEEC re-imports: exemption applied where core scheme conditions were not fulfilled and later notification covered the goods.

Re-imported aluminium alloy extruded products were treated as outside the DEEC exclusion because the scheme's essential conditions were not fulfilled in substance, despite export under a DEEC shipping bill. The Tribunal accepted that the goods were not exported under the DEEC scheme where the foreign buyer had not taken over the goods and the required foreign exchange remittance conditions were unmet, so Notification No. 97/95-Cus did not bar exemption. It also noted that Notification No. 94/96-Cus provided a separate re-import exemption route, and that the relevant procedural conditions, including prior intimation, were satisfied before clearance from customs custody.

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Issues: Whether re-imported goods exported under a DEEC shipping bill were barred from exemption under Notification No. 97/95-Cus. merely because the export had been routed through the DEEC scheme, or whether the benefit remained available when the essential conditions of the scheme had not been substantially fulfilled.

Analysis: The exemption under Notification No. 97/95-Cus. was excluded by the second proviso only in respect of goods re-imported after export under the DEEC scheme. The relevant inquiry was not the mere form of the shipping bill, but whether the export obligation and other vital ingredients of the scheme had in fact been fulfilled. The goods had been refused by the foreign buyer, no effective export performance had been completed, and the DEEC mechanism had not been substantially worked out, including the absence of final closure of the DEEC process. On a substance-based reading of the scheme, the goods could not be treated as having been exported under the DEEC scheme in the sense contemplated by the disabling proviso.

Conclusion: The bar under condition (b) of the second proviso to Notification No. 97/95-Cus. did not apply, and the appellant was entitled to the exemption on re-importation.

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