Custom, Excise & Service Tax Tribunal
Baroda Rayon Corporation Ltd vs Ahmedabad on 31 January, 2022
Customs, Excise & Service Tax Appellate Tribunal
West Zonal Bench At Ahmedabad
REGIONAL BENCH- COURT NO.3
Customs Appeal No.10752 of 2019
(Arising out of Notification Order-F-NO-VIII-48-47-T-CCO-2015 dated 07/03/2019 passed
by Commissioner ( Appeals ) Commissioner of Central Excise, Customs and Service Tax-
AHMEDABAD)
Baroda Rayon Corporation Ltd ...Appellant
Po Fateh Nagar, Udhna
Surat, Gujarat
VERSUS
C.C.-Ahmedabad .........Respondent
Custom House, Near All India Radio Navrangpura, Ahmedabad, Gujarat APPEARANCE:
Shri. Deepak Kumar, Advocate for the Appellant Shri. Vinod Lukose, Superintendent (Authorized Representative) for the Respondent CORAM: HON'BLE MEMBER (JUDICIAL), MR. RAMESH NAIR HON'BLE MEMBER (TECHNICAL), MR. RAJU Final Order No. A/ 10064 /2022 DATE OF HEARING: 30.09.2021 DATE OF DECISION: 31.01.2022 RAMESH NAIR This appeal is directed against the communication letter F No.VIII/48-47/T/CCO/2015/15824 dated 07.03.2019 whereby the Additional Commissioner communicated the decision of the learned Chief Commissioner wherein the application for extension of warehousing period and reexport in respect of 21 consignments of imported capital goods was rejected.
1.1 The brief facts of the case are that the appellant M/s Baroda Rayon Corporation Limited is a public limited company started its commercial production of Viscose Filament Yarn i.e. Rayon Yarn in 1962. The factory was situated on the freehold land consisting of 109 acres where the company established Power Plant, Water Treatment Plant, Effluent Treatment Plant, Railway Siding, Housing Colony for its employees, recreational facilities, Cooperative Credit Societies etc. The company
2|Page C/10752/2019-DB diversified its activities by installing a Nylon Plant in 1974 and in a couple of years, it established Polyester Plant. Thereafter, the Company established Nylon Tyre Cord Plant in 1981. In the year 1995-1996 the company had imported Plant and Machineries/equipments under OGL from Japan, Germany and Korea after executing 21 Bonds amounting to Rs 18,01,31,442/-. The goods were initially stored at Bombay Location to the safety and security of goods . On the request of the appellant the imported goods were allowed to be shifted from Bombay to appellant's private bonded warehouse at Surat.
1.2 After the expiry of Initial warehousing period, the company had applied for first extension of warehousing period and the department had granted first extension up to 30.06.1996 for six months. As the appellant was not able to clear the imported plants & Machineries/equipments due to financial crunch, the company had appliedfor the second extension which was granted by the department up to 31.12.1996. The third extension was granted by the Department up to 30.06.1997. The company had applied for fourth extension which was granted by Department up to 31.12.1997. The company had applied for fifth extension for six months from01.01.1998;
however, the same was rejected. The company had applied for sixth extension for sixmonths upto 31.07.1999 however no reply was received for the said application. The company had applied for seventh extension for 6 months up to 31.01.2000; however no reply was received for the said application. The company had applied for eighth extension up to 31.07.2000 however no reply received for the said application. The company had applied for ninth extension from 01.08.200 to 31.01.2001; no reply was received for the said application. The company had applied for tenth extension for the period 01.02.2001 to 31.07.2001 for six months however, no reply was received for the said application.
3|Page C/10752/2019-DB 1.3 As the company was not able to clear the imported Plant & Machineries/ equipments from their bonded warehouse after the expiry
of permitted extended warehousing, therefore, the department issued 16 Show Cause Notices . The Assistant Commissioner of Central Excise Surat-I vide 16 OIO's all dated 30.03.2001 had confirmed the total custom duty amount of Rs. 5,30,36,179/- and imposed penalty of Rs 10,000/- on each bond. In respect of 16 SCN and also order to recover the interest on appropriate rate against these 16 OIO's appeals were filed by the appellant before Commissioner (Appeals) Surat, who vide Single OIA dated 15.01.2001 rejected all these appeals. The appeal filed against the said Commissioner (Appeals), Surat, order weredismissed onmerit by CESTAT Mumbai vide its order dated 25.11.2002. Thereafter 5showbecausenotices dated 27.11.2001 were issued by the department vide his OIO No. SRT-I/AJD/15/D/2003 dated 28.04.2003 whereby confirmed the custom duty of Rs. 1, 55, 60,368/- and imposed a penalty of Rs 10,000/- on each bond and also to recover the interest at appropriate rate. The appeal against the said order was dismissed by Commissioner (Appeals), Surat, vide its order dated 12.12.2003 due to non compliance of Pre- deposit of Rs one Crore. Further the appeals against the said Commissioner (Appeals), Surat Order was filed before the CESTAT, Mumbai, who vide its order dated 26.05.2004 reduced the pre- deposit from One Crore to Rs 50 Lakhs to be deposited by the appellant with 3 months and report compliance to Commissioner(Appeals), Surat who will decide all these appeals on merit. As the appellant did not have the sufficient funds of Rs 50 Lakhs and therefore, no compliance of the said order was made and hence by default the Commissioner (Appeals) order became final.Thus, the liability of Principal duesof Custom Duty Rs. 688.06 Lakhs is outstandingfrom the appellant on the bonded plants, Machineries/equipments imported during the year 1995-1996. Thereafter,on 26.10.2006 the appellant requested the Department for transferring the bonded plants &
4|Page C/10752/2019-DB Machineries/equipments lying in their private bonded warehouse outside the factory premises to inside the factory premises at Surat. The department in its reply dated 19.01.2007 stated that since request for extension of warehousing period has been rejected beyond the year 1998 and since the SCN for all the consignments were already given to the appellant has been confirmed duty demand of Rs 6,85,96,547/- and penalty of Rs. 2,10,000/- along with interest is still pending for recovery . Therefore, permission cannot be granted to shift the goods inside the factory at Surat. Thereafter, when the appellant vide its letter dated 09.02.2007 given a detailed justification for safety and security of bonded plants &Machineries/equipments if the same are not shifted inside the factory premises, the permission was granted by the department as per letter dated 07.06.2007. Accordingly, the plant and Machineries/equipments were shifted inside the factory during 23rd to 26th October, 2007 and the same was acknowledged by the Department on 29.10.2007. However, the plant and Machineries/equipments imported in the year 1995-96 has not been installed as yet and still lying in bonded warehouse. In the factory premises of the company in good, sound and intact conditions without any deterioration and has not lost its marketability. The company became relief undertaking under provisions of Bombay Relief Undertaking Act, 1958 as per letter dated 16.03.2001 thereafter, the company became a sick industrial unit under Section 15(1) of SICA, 1985 based on its negative networth for the year ending 31.3.2000. The appellant's case was accordingly registered under BIFR as case No.67/2004 as evident from BIFR letter dated 23.01.2004. The factory was remained close for 13 months from June,1999 to June 2000, for 17 months from August 2002 to December 2003 & 126 months from August 2008 to till date thereafter, vide letter dated 23.06.2008 stated that the capital goods were imported for proposed project of Poly-Condensation plan which was to be undertaken as backward integration project for production of Polyester Chips. It was further stated in
5|Page C/10752/2019-DB the letter that even if, they clear this bonded capital goods, they will not be able to install commission and use them since they have become technically and economically unfeasible. Accordingly, the appellant requested the department to accord permission for re-export of the consignments in terms of Board's Circular No.03/2003-CUS dated 14.01.2003. The appellant again requested the department vide the letter dated 22.07.2008 and letter dated 06.10.2008 to expedite the permission of re-export. They once again requested the department vide their letter dated 11.03.2015 and letter dated 03.11.2017 to grant permission to re-export the said warehoused goods and consequent extension of warehousing period. The appellant kept reminding the authorities for re-export of said consignments under Section 69 ibid along with consequent extension of warehousing period from the year 2008 till the year 2018. As the same could not be rigorously pursued as the company was passing through a phase of sickness under Bombay Relief undertaking Act and SICA Act, 1985.
1.4 During the period of 16 years from year 2000- 2016 the appellant case was pending before BIFR/AAIFR, the department neither took any action for recovery of the Custom Duty on account of expiry of extended warehousing period nor decided the appellant request for re-export of warehoused goods. In this background the appellant vide its letter dated 15.11.2018 has requested the Chief Commission of Customs, Gujarat Zone, Ahmedabad for extending the warehouse period as the appellant was going to re-export the imported plant, Machineries/equipments. This was followed up vide their letter dated 03.12.2018 the said request of extension of warehousing period on account of re-export has been rejected by the Chief Commissioner vide its letter dated 19.12.2018 on the ground that once the show cause notice has been issued and demand has been confirmed upto thelevel of the Tribunal i.e. the matter has already attained the finality and therefore the representation does not merit any consideration.
6|Page C/10752/2019-DB 1.5 As the appellant was not satisfied with the reply received from the office of the Chief Commissioner of Custom, Gujarat Zone, Ahmedabad, the appellant again approached him vide its letter dated 15.02.2019 to reconsider the request for re-export of entire warehoused plants & machineries/equipments with consequent extension of warehousing period till the goods are re-exported. The said request for re-export of warehoused plants, machineries/equipments and consequent extension of warehousing period till the limited time within which the goods will be re- exported was rejected by the Chief Commissioner of Customs, Gujarat Zone, Ahmedabad vide his letter F.NO VIII/48-47/T/CCO/2015/15824 dated 07.03.2019 against which the present appeal was filed.
2. Shri Deepak Kumar, Learned Consultant appearing on behalf of the appellant submits that the Learned Chief Commissioner of Customs has wrongly rejected the request for re- export of warehoused plants & machineries/equipments along with consequent extension of warehousing period as the same is against the Board Circular 03/2003- Cus dated 14.01.2003 and various statutory provisions. He submits that the ground of rejection is that once the SCN has been issued and demand has been confirmed upto the level of Tribunal i.e. the matter has already attained finality, the representation does not merit any consideration is not correct and proper for the reason that since the goods are remained in warehouse the re-export cannot attract any duty. He referred to proviso to Section 61(b) ibdi as amended with effect from 13.05.1994 which provides that warehoused goods other than capital goods for use in 100% EOU may be left in the warehouse which they are deposited till the expiry of the period of one year and in case of goods which are not likely to deteriorate , the prescribed period of warehousing of one year on sufficient cause being shown, be extended by the Commissioner of Customs for a period not exceeding 6 months and by the Chief Commissioner of Customs for such
7|Page C/10752/2019-DB period as deem fit. Although the said section was amended from time to time but the Chief Commissioner of Customs continued to enjoy unlimited power for extending the warehousing period in case of goods which are not likely to deteriorate.
2.1 He also referred to Board Circular No 12/2007-Cus dated 14.02.2007 based on accepted Gujarat High Court order dated 07.10.2005 in case of m/s Amtrex Hitachi Appliances and Hon'ble Karnataka High Court in of M/s Bangalore Wire Rod Mills wherein it was clarified that the amendment to Customs Act modifying the terms and conditions subject to which the goods shall remain warehoused shall not apply to goods warehoused prior to the amendment. Thus subsequent amendment of the said section 61 after the goods were warehoused in 1995-1996 is of no implication to the appellant's case. Thus the Chief Commissioner of Customs had unlimited power of extending the warehousing period without any restriction imposed under section 61 subsequent to the warehousing of the goods by the appellant in 1995-1996 shall not be applicable. 2.2 He submits that as per Section 72(1)(d) of the Customs Act, 1962 where any goods in respect of which a bond has been executed under section 59 and which have not been cleared from home consumption after expiry of warehousing period, the proper officer may demand the duty after the expiry of warehousing period without issuing any SCN whereas in the present case SCN was issued and demand was confirmed by adjudication which is not proper. He further referrer to Board Circular No 13/96-Cus dated 28.02.1996 and submits that the process of adjudication and appeal in respect of demand issued after the expiry of warehousing period up to the period of Tribunal was unwarranted, as in such cases after raising demand for full amount of duty, rent , interest etc. the action is required to be taken for detention and sale of the warehoused goods after notice to the owner. Therefore, the order rejecting the appellant's
8|Page C/10752/2019-DB request for re-export by extending the warehousing period on the ground that the matter had reached finality up to the level of tribunal, requires to be set aside as the said process was not correct in law in terms of Section 72 ibid.
2.3 He submits that it is not the Department case that conditions of Section 69 which permits clearance of warehoused goods for export without payment of duty has not been fulfilled by the appellant, hence the impugned order denying the extension of warehousing period for purpose of export as against the provisions of Section 69 and therefore needs to be set aside and allowed the export. He further submits that the board has examined the issue of considering the request for re-export of the warehoused goods even if permitted period of bonding has expired and demand has been issued.
2.4 He referred to Circular No 03/2003 -Cus dated 14.01.2003 wherein the board has specifically clarified that request for re-export of warehousing goods under Section 69 ibid may be permitted even after permissible period of bonding has expired and demand notice has been issued. In fact it goes to the extent of allowing re-export even in cases where it has been decided to put the goods under auction. The bonded goods are put to auction only after entire proceedings are finalized, whereas in the appellant's case although warehousing period has expired and demand notice has been issued/confirmed, the same are yet to be put to auction. Therefore, in terms of the said circular precarious financial condition of the appellant due to closure of the units for last so many years, the request of the appellant for re-export of the warehoused goods without payment of duty ought to have been allowed under Section 69 of the Customs Act, 1962 and as corollary to the same, the period of warehousing ought to have been extended as is mandatorily required so
9|Page C/10752/2019-DB as to enable the appellant to export the goods within extended permitted period of warehousing.
2.5 He further submits that as regard the reliance placed by Learned DR on the Bombay High Court Judgment in the case of M/s Videocon International Ltd reported at 2003 (155) ELT 25-(Bom) and withdrawal the appeal filed by party in Supreme Court . It is his submission that after the said judgment dated 29.09.2002 the board has issued a circular dated 14.01.2003 (Supra) permitting the re-export of the warehoused goods without payment of duty under section 69 ibid even if permitted period of bonding has expired and demand notice has been issued or it has been decided to put the goods under Auction. Before permitting re-export in each such case by the chief Commissioner it will be necessary for him to extend the period of warehousing under section 61ibid to enable the importer to export the goods within the permitted extended period of warehousing in the light of its circular dated 14.01.2003 which extended the benefit to M/s Videocon International (Supra) the appeal filed by them before the Hon'ble Supreme Court had become infructuous hence on their request the Hon'ble Supreme vide its order dated 10.7.2003 allowed the appeal to be withdrawn. The Department also relied upon Madras High Court judgment dated 04.03.2015 passed by Single Judge in the case of Bini Ltd reported at2015 (320) ELT 750(MAD) . He submits that against this decision of the Single Judge the matter was carried to the Division bench of Madras High Court who vide its order dated 27.07.2016 reported at 2016 (340) ELT 162 (Mad) wherein it was held that the opportunity be given to the appellant to re-export the goods in question so as to reduce the burden cast on them.This judgment of the Madras High Court has been accepted by the department and the appellant was allowed to re-export these textile machinery, which they exported during the year 2017 to a buyer in UAE. HE submits that in view of the above judgment the impugned order dated 10 | P a g e C/10752/2019-DB 07.03.2019 passed by the Chief Commissioner of Customs, Gujarat Zone, Ahmedabad set aside and appeal be allowed to allow the re-export of plant, machineries/equipments under Section 69 of the Customs act, 1962 without payment of the import duty and as a corollary to the same corresponding warehousing period be also extended in terms of Board Circular No. 03/2003- CUS dated 14.01.2003 for the period within which the said goods will be re-exported.
2.6 Without prejudice he further submits that although till date the appellant has not cleared the warehoused goods for home consumption by payment of duty even after the Hon'ble Tribunal Order they still have the said option of clearing warehoused goods for home consumption till the date it is decided by the department to sell these gods by auction in terms of Section 72ibid. In this situation even after clearing the warehoused goods on payment of duty for home consumption , the appellant will continue to have the right to export the imported plant, machineries/equipments, which have not been put to use at all as yet to claim drawback of 98% of duty paid on the imported goods in terms of Section 74ibid.Thus in case of export, for which the appellant is eligible, net effect of duty payable would be 2% i.e. difference between duty payable and drawback admissible under Section 74ibid as it is clear that they are eligible for 98% of the duty drawback if the duty is paid by them.In support of his this submission, he placed reliance on the following judgments:
M/s Sedco Forex International - 2001 (135) ELT 635(Tri. Mum.) M/s Cipla Ltd -1995 (80) ELT 17- (Bom.) M/s Shipping Corporation of India - 2014 (312) ELT 305(Tri.Bom) M/s Jagson International Ltd in Customs Appeal No. C/10329/2019 vide Final order No A/10827/2019 dated 09.05.2019 11 | P a g e C/10752/2019-DB 2.7 With his above submission he requested that the appellant be allowed the re-export of the goods without payment of custom duty under Section 69 and consequent extension of warehousing period.
3. Shri Vinod Lukose, Learned Superintendent (AR) appearing on behalf of the revenue reiterates the decision taken by the Chief Commissioner of Customs. He further submits that in this case since the demand has been confirmed and the same is upheld up to the Tribunal the request of the appellant for re-export and extension of Warehousing period cannot be granted. He placed reliance on the following judgments:
Videocon International Ltd- 2003 (155) ELT 25 (Bom) Videocon International Ltd-2003 (158) ELT A185 (SC) Allied Fibres Ltd - 2014 (309) ELT 535 (Tri. Mum) Simplex Casting Ltd - 2001 (137) ELT 530 (Tri. DEL) Binny Ltd - 2015 (320) ELT 750 (Mad) Shakti LPG Ltd - 2008 (222) ELT 129 (SC) Goedicke (I) Pvt. Ltd - 2002(144) ELT 91 (Tri. Bang) Kesoram Rayon - 1996 (86) ELT 464 (SC) JSW Steel Ltd - 2015 (3025) ELT 629 (SC)
4. We have carefully considered the submission made by both sides and perused the records. As per the impugned order the learned Chief Commissioner denied the request of the appellant for extension of warehousing period and consequential re-export of the bonded goods only on the ground that with reference to the bonded goods the SCN was issued and demand was confirmed and the same was upheld by the Tribunal. We find that even though the demand was confirmed but the goods are still lying in the warehouse and not cleared there from the custom duty is payable only at the time of clearance from the warehouse for home consumption.So long the goods remained in the warehouse no custom 12 | P a g e C/10752/2019-DB duty required to be paid. In the present case the appellant's request is to allow the re-export of the bonded goods. When the bonded goods isexported without taking a clearance for home consumption no custom duty can be demanded on such re- export of the goods.
4.1 As regard the export of the warehouse goods the provision is made under Section 69 of the Customs Act, 1962 which is reproduced below:
"69. Clearance of warehoused goods for exportation.--
(1) Any warehoused goods may be exported to a place outside India without payment of import duty if--
(a) a shipping bill or a bill of export has been presented in respect of such goods in the prescribed form;
(b) the export duty, penalties, rent, interest and other charges payable in respect of such goods have been paid; and
(c) an order for clearance of such goods for exportation has been made by the proper officer.
(2) Notwithstanding anything contained in sub-section (1), if the Central Government is of opinion that warehoused goods of any specified description are likely to be smuggled back into India, it may, by notification in the Official Gazette, direct that such goods shall not be exported to any place outside India without payment of duty or may be allowed to be so exported subject to such restrictions and conditions as may be specified in the notification"
From the above provision of Section 69 it is clear that warehouse goods are allowed to be exported from the warehouse without payment of duty. In the present case this fact is not under dispute that the goods which sought to be exported are indeed warehoused goods as the same are still lying in the Warehouse. As per this statutory provision even though the duty was otherwise confirmed by the adjudication process the same is payable only when the goods are 13 | P a g e C/10752/2019-DB cleared for home consumption but by virtue of Section 69 when the appellant seeks export of goods from the warehouse itself the same shall be allowed without payment of duty.
4.2 The appellant also strongly relied upon the Board circular 03/2003- CUS dated 14.01.2003. The relevant para is reproduced below:
"2. The matter has been examined in the Board. It has been decided that in case an importer makes a request to permit re- export of the goods under section 69 of the Customs Act, 1962, such a request may be allowed even if the permitted period for bonding has expired and demand notice has been issued , or it has been decided to put the goods under auction. Before permitting re-export in each such case , however, it will be necessary to extend the period of warehousing under Section 61 of the Customs Act to enable the importer to export the goods within the permitted period of warehousing."
From the plain reading of the above circular it is clear that when importer makes a request for re- export of goods under section 69 of Customs Act , 1962 the same should be allowed even if the bonding period has expired and demand notice has been issued or even the goods are put under auction. The circular also provides that before permitting the re- export it will be necessary to extend the period of warehousing under Section 69 of the Customs Act, 1962 to enable the importer to export the goods within the extended period of warehousing. The present case of the appellant is on much better footing as the goods are warehoused it has not been put for auction by the department. As regard the state of warehousing period that the same is expired but as per the circular once the appellant has made a request for re-export, even though the warehousing period has expired the same needs to be extended enabling the appellant to re- export the goods. The appellant made a request in the light of the above circular which in our considered view must be allowed and in view of the 14 | P a g e C/10752/2019-DB circular the appellant is entitled for re-export of the warehoused goods without payment of any duty and consequently the warehousing period should be extended till the re-export is taken place. 4.3 As regard the provision under Section 72(1)(d) of the Customs Act, 1962 it indicates that where bonded warehoused goods have not been cleared from home consumption, the proper officer may demand the duty and the owner of such goods shall forthwith pay full amount of duty chargeable on account of such goods together with all penalties , rent, interest etc and if owners fails to pay the amount demanded under subsection(1) the proper officer may detain the said goods and thereafter sell them after notice to the owner in terms of Section 72(1) (d)ibid. In our view this provision applies firstly when the department wish to sell the goods by auction. Secondly, only in case when the appellant failed to clear the goods for home consumption. In the present case it is the appellant's request to allow the re-export of the goods therefore, in terms of the circular dated 14.01.2003 despite the provision under section 72(1)(d) the re-export is permissible without payment of duty. Therefore, there is no conflict between the board circular 03/2003-Cus dated 14.01.2003 and Section 72(1)(d) of the Customs Act ,1962 as the said section is applicable only in case when the goods are cleared for home consumption or in case the appellant do not intend to clear the goods and department proceed to sell the goods by auction. However, in the present case neither the goods were cleared for home consumption nor the department has initiated any action for sale of the goods. Therefore, in terms of the board circular 03/2003-Cus dated 14.01.2003 the appellant is entitled for re- export of the goods without payment of duty and consequently also entitled for extension of warehousing period.
4.4 Now coming to the judgments relied upon by the revenue, We find that judgment in the case of Videocon International (Supra) wherein the 15 | P a g e C/10752/2019-DB appeal filed before the Hon'ble Supreme Court was withdrawn for the reason that the board had issued a circular dated 14.01.2003 permitting the re-export for warehoused goods without payment of duty under section 69ibid even if permitted period of bonding has expired and demand notice has been issued or it has been decided to put the goods under auction. In view of this circular even though the demand was confirmed and appeal was withdrawn from the Hon'ble Supreme Court, the assessee in that case has liberty to avail the benefit of Circular dated 14.01.2003 and same was extended to M/S Videocon International. For this reason appeal filed by the M/s Videocon International becomes infructuous and withdrawn. Therefore, this judgment has no help to the revenue, it supports the case of the present appellant.
4.5 As regard the judgment in the case of Binny Ltd which is of Single Judge order, against the same order the division bench vide its order dated 27.07.2016 allowed the assessee to re-export the goods and the said judgment was accepted by the department and appellant was allowed to re-export textile machinery which they exported during the year 2017. The judgment of division bench of Madras High Court (supra) in fact support the case of the appellant and the judgment of single judge relied upon by Revenue is not a good law and the same has been departed.As per our above view the appellant is clearly entitled for re-export of the warehouse goods and consequently entitled for extension of warehousing period. 4.6 Without prejudice to above we find that the appellant has also taken alternate ground that even though the goods are cleared for home consumption and the same is exported, the appellant is entitled for 98% duty drawback under Section 74 of the Customs Act, 1962. Therefore, even if it is assume that goods to be cleared for home consumption even then the appellant is not liable to pay more than 2% of the total duty payable on the imported goods. This issue has 16 | P a g e C/10752/2019-DB been considered time and again.In the case of M/s Sedco Forex International (Supra) it has been held that duty liability in case of export of imported goods be worked out after taking into account the drawback if any that appellant would be entitled to. Similarly, in the case of M/s Cipla Ltd (Supra) the assessee was allowed to re-export the goods on payment of differential duty of 2% after adjusting the drawback of 98% of duty admissible to them in terms of Section 74.
4.7 In the case of M/s Shipping Corporation of India (Supra) the Tribunal Mumbai has allowed the adjustment of duty payment against drawback admissible to the appellant. Dealing with the identical issue this CESTAT Ahmedabad bench in the case of M/s Jagson International Ltd vide final order no A/10827/2019 dated 09.05.2019 has held as under :
"4. ........the Appellant after payment of redemption fine and penalty has option either to pay duty if he wants to keep the goods in India or to re export the same. In case of re-export for which he is eligible, the net effect of duty payable by him would be 2% i.e. difference between the duty payable and drawback amount under Section 74 of the Customs Act. It is also clear that he is eligible for 98% duty drawback of the duty paid by them.
5. ......... Going by the facts of the present case and settled legal position as cited above, we are of the view that the Appellant is eligible for re-export of impugned goods on payment of 2% differential duty as above.
6.......
7. In view of our above discussions and observations, we hold that the impugned order is not sustainable and the appellants are allowed to re- export the impugned imported goods on payment of 2% differential duty,......."
4.8 In the above judgments also the re-export of the imported goods was allowed on payment of 2% differential duty. This benefit is alternatively available to the present appellant also. However, since the appellant sought 17 | P a g e C/10752/2019-DB to export the goods from warehouse itself, in our view even the appellant is not required to pay 2% duty as we already held in the foregoing paras that in the case of warehoused goods the export should be allowed without payment of duty.
5. As per our above discussion and finding we pass the following order:
(i)The appellant is allowed to re-export the warehoused goods without payment of duty/fine/penalty if any.
(ii)The warehousing period of the imported goods shall also be extended for
6 Months or further period within which the goods are re-exported
6. The appeal is allowed in above term.
(Pronounced in the open court on 31.01.2022 ) (RAMESH NAIR) (MEMBER JUDICIAL) (RAJU) (MEMBER TECHNICAL) Geeta